Highest Growth In 15 Cities : Chennai’s Real Estate Price Up 196% In 4 Years

T. Chitty Babu, Secretary, CREDAI

The flats (residential apartment) market in Chennai city has been the most stable among urban centres in India in the last 4 years.

Residex, the residential price index brought out by the NHB (National Housing Bank), shows that except for a slight correction in 2008 on account of the global economic slowdown, flats prices in Chennai registered a steady growth, quarter after quarter.

Highest growth of 196% ..!

Among the 15 cities covered in the survey, Chennai city witnessed the highest growth of 196% between December 2007  (when NHB started recording Residex) and December 2011.

In Chennai city  prices softened all through 2008, they went up by 48% in 2009, 49% in 2010 &  38% in 2012.

City Name	2007 Residex	Dec. 2008	Dec. 2009	Dec. 2010	Dec. 2011
Chennai	100	95	143	214	296
Hyderabad	100	92	81	87	79
Delhi	100	130	113	123	167
Bangalore	100	76	59	101	100
Pune	100	97	117	141	184
Mumbai	100	117	126	173	193
Kochi	100	95	83	97	82

A fine balance between the demand and supply apart, Chennai has traditionally been a conservative, end users’ market.

 Mr. T. Chitty Babu, Secretary, CREDAI (Confederation of Real Estate Developers’ Association of India) said, “Chennai city was the first city to recover from the 2008 fall. The city and its suburbs have seen robust growth in automobile, telecom, textile and leather industries, over & above the IT sector. Nearly  one lakh jobs have been generated annually in the last 2 years. Moreover, the CBD (Central business district ) or the core city does not have much space for creating new residential stock. When the middle class & the lower middle class move to the suburbs, the rich people are keen on staying within the Chennai city. It pushes the realty prices up"

This has had a negative fallout on the suburban market as well. Nanganallur, Adambakkam, Mogappair & other residential hubs on the periphery of the CBD, which were havens for the middle &  lower middle class for close to 2 decades, have become exceedingly costly over the Last year.

Nanganallur is now quoting Rs. 8,500 per square feet.  This is a place where the price was in the region of Rs. 3,000 to Rs 5,000 till recently and one could buy a house for less than Rs. 30 lakh.
   
Mumbai and Pune  are the only other markets that  remained fairly steady during the same period. Mumbai has gone up by only 93% above the 2007 mark. Pune is only 84%  & New Delhi, though not a booming market, has seen some incremental steady growth.

Most other cities have had a chequered graph. For instance, Kolkata, Faridabad and Bhopal, despite growing during the turbulent times in 2008, could not maintain the tempo.

Worst markets..!

The worst markets, however, are Jaipur, Hyderabad, Kochi & Bangalore, in that order. They are still below the 2007 base index of 100 points. Jaipur is 36% below, Hyderabad 21%, Kochi 18% lower, &  Bangalore has just about recovered to the 2007 mark.

Src: TOI and NHB

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