Chennai was one of the most stable markets in all of India. It was a speculation free city where buyers where genuine and researched well before they dumped all their hard earned income into a property. The market was made up of conservative buyers and this was reflected in the property purchases that they had made. So the market had remained stable and mostly profitable.
Over the last few years a number of factors have brought the reality business to a point of stagnation. The first factor is the spill over effect from the sluggish of the Indian real estate market. Even though the cultural capital of the country was a safe real estate destination, it could not save itself from the onslaught that rest of the country was facing.
Another factor that has affected realty in this city was to do with a natural disaster the city face in the last month of 2015. The unprecedented floods which the city witness due to a historically high downpour on a single day in December left the city in tatters. A lot of damage was caused to life and property. After taking this kind of a hit, the city’s real estate market has also witnessed a slump. Buyers and investors are staying away from low lying areas. This has hurt the market quite badly according to some recent reports. The number of new launches has also come down. There isn’t enough supply of apartments for sale in Chennai. This has affected the sales figures as well.
Demonetization has also done a number on the apartments for sale in Chennai. Sales have gone down by about 20% when compared to the sales number for the same time period a year ago. The number of restrictions put on the flow of currency ensured that buyers who were looking for properties in Chennai put off their property purchase decision till things settled down. This affected the numbers for the second half of 2016.
The job market in Chennai has not been that good off late as well. For properties in Chennai to do well, there has to be a steady number of jobs being created in the city. There is hardly any activity happening along the Old Mahabalipuram Road which is considered to be an Information Technology hub of importance in the city. This being the state of affairs, it is no wonder that city’s realty sector is stagnant at the moment.
There is some hope yet for the city though. There are pockets of affordability and growth sprinkled across the city. The rental market in the city is also quite vibrant. The city still remains one of affordable metros in the country. So if you choose the right location you might be able to squeeze some profits. The city is also going to become a Smart City thanks to the central government. This project could inject some much needed enthusiasm into the sector in the near future. So Chennai is not a lost cause after all.