Chennai, is referred to as the gateway of southern India, is well known for its port-oriented business and engineering, manufacturing, IT-ITeS sector, amidst other thriving industries.
Chennai has consistently become a busy market for the real estate sector. A major metropolitan city with historical importance and significance has been tough and resilient to combat the impact of natural calamities and emerge as a strong contender to become a critical contributor to the development of the nation. The city’s economy has been driven by services and manufacturing sectors and maintains a perfect balance of overall growth. Owing to its key position it enjoys a big network of major roads, railways, ports and airports have been instrumental in enabling trade from the city. People are more interested in investing in this city more than ever, despite the ongoing pandemic it looks like a promising year for Chennai.
The major infrastructure projects such as the monorail, metro connectivity and the new international airport are likely to catalyse future growth of the city. Chennai is already home to several national and international automobile manufacturers, the upcoming Aerospace park at Sriperumbudur is going to metamorphose the economic landscape of the region. This is likely to drive an opportunity for increased investments and will also help generate tremendous employment opportunities, leading to rapid urbanisation.
There is a huge demand for rental properties, and that is why we see a remarkable increase in second homeowners in Chennai. With the rapid development of the IT-ITeS sector and manufacturing industries in the city, working professionals from various parts of the country have thronged to Chennai. This leap in cosmopolitan population changed the city’s housing requirements and led to the emergence of high-rise apartments. Considering that Chennai has recently embarked on the journey of apartments and is seeing a steady growth.
Affordable Segment Growth
The affordable and mid segment (units priced INR <80 lakh) is expected to continue to grow in the coming years as this segment is attracting more traction across the nation due to government’s push with GST incentives. The increase in launches in the affordable segment is due to a good reduction in prices and a general reduction in the configuration of housing unit sizes.
Chennai’s economy is driven by automobile, manufacturing and IT-ITeS sectors with an estimated GDP of USD78.6 billion in 2018. The city contributes 14% to the country’s IT services making it the second largest exporter. Chennai is also home to 40% of the automobile production in the country which earned it the tag of ‘Detroit of India’. The decadal growth rate of population and population density is slower in comparison to other south Indian cities such as Bengaluru and Hyderabad, due to which the nature of residential real estate developments here is significantly different. To support the population growth of the city, CMA has drafted a master plan to accommodate and facilitate the rising residential real estate developments.
In conclusion, the city’s zeal and capability to react favourably to the various external and internal forces makes Chennai quite unique and a favourable real estate investment. There is enough potential for growth and development despite some of the recent headwinds it has been experiencing. Developer profile, location dynamics, right product mix, presence of adequate infrastructure and judicious pricing are major factors driving success in the future in Chennai.
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