The real estate sector, which had been sinking since the 2012 slowdown, witnessed one of the worst years in 2016. These are mostly due to multiple reasons such as the devastation wreaked by last year's floods, assembly election and demonetization.
Realtors recorded a drastic 50% drop in the number of new launches in the residential segment and the floods in December 2015 doomed the real estate market in the southern suburbs, particularly West Tambaram.
"It was one more uneventful year for the city's real estate market. There was no great activity as far as the residential sector was concerned," Ajit Chordia, former president of Confederation of Real Estate Developers Association of India (Credai) Chennai chapter said. However, the office space market hit the roof breaking new records. "The silver lining has been a record absorption of office space, which would take all the analysts by surprise," he said adding that almost 5.8 million sqft of office space was absorbed this year, which is an all-time high.
The ripples of the natural calamity in 2015 made the price-conscious property buyers of Chennai enquire whether the areas identified for proposed investment are flood prone or not. According to Ramaprabhu, secretary of the Builders' Association of India's southern centre, home buyers are curious to know about the water level recorded in the area during last year floods. "If the new launches in other parts of Chennai dipped by 40 percent, it was 80 percent in areas around West Tambaram," he said.
While there was a lull in the real estate market for about two months in the run-up to the state assembly elections primarily owing to restrictions in carrying cash, a landmark judgement by the Madras high court in September this year put an end to the registration of unapproved plots. A month after the high court's ban, the state registration department reported a fall in revenue to the tune of `300 crore. Against this backdrop came Centre's demonetization of `500 and `1,000 denominations in November. It further hit the market. Chennai Real Estates Agents' Association president Chandrasekar Kaliamurthy said the demonetization drive had impacted about 20 to 25 percent of sales in the city's real estate sector. However, he stressed that demonetization would help banks reduce the interest rate on home loans in 2017.
A Shankar, national director of Jones Lang LaSalle, an international realty consultant, said that banks were flush with money after demonetization. "Banks may also pitch in with funds for layout developers and individual buyers to purchase plots approved by the DTCP and CMDA," he noted.
Realtors recorded a drastic 50% drop in the number of new launches in the residential segment and the floods in December 2015 doomed the real estate market in the southern suburbs, particularly West Tambaram.
"It was one more uneventful year for the city's real estate market. There was no great activity as far as the residential sector was concerned," Ajit Chordia, former president of Confederation of Real Estate Developers Association of India (Credai) Chennai chapter said. However, the office space market hit the roof breaking new records. "The silver lining has been a record absorption of office space, which would take all the analysts by surprise," he said adding that almost 5.8 million sqft of office space was absorbed this year, which is an all-time high.
The ripples of the natural calamity in 2015 made the price-conscious property buyers of Chennai enquire whether the areas identified for proposed investment are flood prone or not. According to Ramaprabhu, secretary of the Builders' Association of India's southern centre, home buyers are curious to know about the water level recorded in the area during last year floods. "If the new launches in other parts of Chennai dipped by 40 percent, it was 80 percent in areas around West Tambaram," he said.
While there was a lull in the real estate market for about two months in the run-up to the state assembly elections primarily owing to restrictions in carrying cash, a landmark judgement by the Madras high court in September this year put an end to the registration of unapproved plots. A month after the high court's ban, the state registration department reported a fall in revenue to the tune of `300 crore. Against this backdrop came Centre's demonetization of `500 and `1,000 denominations in November. It further hit the market. Chennai Real Estates Agents' Association president Chandrasekar Kaliamurthy said the demonetization drive had impacted about 20 to 25 percent of sales in the city's real estate sector. However, he stressed that demonetization would help banks reduce the interest rate on home loans in 2017.
A Shankar, national director of Jones Lang LaSalle, an international realty consultant, said that banks were flush with money after demonetization. "Banks may also pitch in with funds for layout developers and individual buyers to purchase plots approved by the DTCP and CMDA," he noted.