Click to play videoChennai: Real estate prices in Chennai which shot up almost 200 per cent in the last two years, now seem to be on their downward ride, as some realty players have been able to sell only a couple of houses in the last six months.
The area along the old Mahabalipuram Road was once mooted as the hottest realty destination in the city. However, now it is turning out to be a dampener, mostly due to lack of infrastructure. There have been only a few takers for flats, which are over 14000 units in size.
“Infrastructure is poor. Connectivity is poor. So once you get all these enables, you will see the OMR starting to thrive again. But the earlier part of investment or whatever happened over there was largely speculative,” says Real Estate Analyst, Sanjay Pillai.
Experts say there has been a 90 per cent drop in demand for residential projects since the beginning of the year.
Office rentals are also seeing a correction. The Central Business District in Chennai has seen a 15 per cent drop. According to a Cushman Wakefield report, the expected supply of the office rental space for 2008 is 18 million square feet. But the absorption rate is a mere third of this.
This is because IT companies, who are now deferring their expansion plans, largely drive the office rental. It is no wonder that the developers are slowing down their project plans. Developers also say that the funds are hard to come by.
“The PE funds are mostly looking at structured deals of the north. Looking at valuations realistically from the perspective of what it was done earlier, they have given discounting of about close to 70 per cent now,” says Real Estate Developers of India, Tamil Nadu, Prakash Challa.
Most Real Estate players in Chennai say they are struggling to sell flats. Meanwhile, the analysts say, that this is the time for developers to sit back and take a realistic look at prices.
(For updates you can share with your friends, follow IBNLive on Facebook, Twitter, Google+ and Pinterest)
 |
 |
 |
|
More on IBNLive Right Now
TOP NEWS
MOST SHARED
PHOTOGALLERY
