CHENNAI: Chennai is the third-most expensive city in the country to buy a residential property as prices have shot up by 9 per cent compared to last year, according to a study by web-based financial company, Artha Yantra Corporation.
The survey of 12 cities conducted by Artha Yantra found that the prices of residential properties as well as rent per square feet have risen in Chennai with the city ranked below only Mumbai and Delhi in terms of rental cost and property prices.
For the study, the following cities were taken up: Bangalore, Chennai, Delhi, Hyderabad, Mumbai, Pune, Kolkata, Ahmedabad, Lucknow, Jaipur, Indore and Kochi.
The availability of houses in areas near Marina, including Triplicane and Chepauk is low which has resulted in prices of the few houses rising by 82 per cent. The rentals in these locations have soared 122 per cent.
Rent rose in Chennai as a whole by 3.1 per cent on an average. Kolathur, Medavakkam and Perambur are the most affordable localities for renting a house. The most expensive locations for buying or renting houses are Adyar, Chetpet, Egmore, Kilpauk and Nungambakkam.
The report also studied the length of time it will take for the middle class to create a corpus for an initial down-payment. As per the study, it will take 5.8 years of savings on an average by a middle-class family in Chennai (Rs 8 lakh to Rs 25 lakh) to generate the corpus for an initial down payment, assuming a savings rate of 10 percent. The EMIs take care of 80 per cent of home loans and accumulating the down payment is an important aspect, according to the study.
If, as before, 80 per cent of all real estate transactions continue to take place in cash, the move to demonetise the Rs 1,000 and the Rs 500 notes could result in a liquidity crunch and cause property prices to crash. The study, however, says that rentals will continue to rise.