Realty Bites Chennai Home Buyers Hard After Floods, Demand for 'Lake Side' Properties Drops

Chennai consumers have caught a sudden and much-needed dose of mindfulness about the location of their homes.

Published: 04th January 2016 05:17 AM  |   Last Updated: 04th January 2016 08:24 AM   |  A+A-

CHENNAI: “Was the project affected by the floods?” asks a wary customer. “No ma’am,” goes the reply. “Well then, do you have pictures to prove that?” she counters. This is how every project enquiry goes now, admits Yaseer Rahman of Connection Point and treasurer of the Chennai Real Estate Agents Association.

Chennai consumers have caught a sudden and much-needed dose of mindfulness about the location of their homes. What the city wants from its property developers and agents has changed big.

Realty Bites.JPGNot only has what they want from their prospective homes changed, a large majority of the city’s denizens are actually acting on these newfound sentiments. Those who can drop investments in existing projects are trying really hard to, and many who want to, are stuck with homes they cannot afford to sell. If at all they can.

“I bought a home in Pallikaranai less than a year ago for Rs 70 lakh. I thought it was a good investment then, but 12 feet of water has disabused me of that notion quite effectively,” points out S Reddy, software engineer.

Reddy, however, has not much of a choice but to hold on to the property, come rain or sunshine, or even floods. Because rates in flood-affected areas are expected to plummet.

“The house was bought on loan. I broached an agent about the prospects of selling it with the loan, but he told me to forget about it for a couple of months. And even if something comes up later, I won’t be able to get the money I put in,” he confesses.

Reddy’s situation is mirrored by many in formerly hot areas like Velachery, Pallikaranai, OMR, certain areas of GST Road and almost all projects close to the Adyar and the Cooum. People with projects on the OMR, especially, are moving.

Take S Shiela, a Bengaluru resident, who decided to invest in a property in Perumbakkam. Now, she finds herself the owner of a new luxury-home that became part of a lake for a whole week. “The parking level was very low, and water had gotten in, fully submerging all the cars. I had bought a ground-floor villa,” says Shiela, who is stuck with the ‘investment’.

Those who can cancel bookings however, are doing so. A loss of a lakh or so rupees notwithstanding. “I myself have cancelled several bookings in half completed projects for my clients,” said Rahman. But not all projects are seeing cancellations. Some, even in areas where flood waters reigned high, are seeing a rise in bookings. The difference? “The projects seeing a rise in bookings are those which have not yet taken off. The rationale being that deficiencies in the design can be corrected, now that consumers know what they want,” he said.

Sentiments in the rental space, however, are moving a lot faster. Tenants in almost all flood-affected areas have started looking for homes. “A client moved from Chetpet, which saw only a feet or so of water to Egmore, paying nearly 25 per cent more, because he was scared,” said Rahman. Odd though, is how rentals are moving at OMR. According to agents there, tenants are trying to shift from places a little further in from the main road to the main road. OMR’s tenants have started churning within the locality itself and this is likely to continue.

But what are the specifics driving the churn, both in OMR and the city as a whole. Consumers have new wants now. “I would not dream of getting a house that does not have a Reverse Osmosis plant and a self contained water supply,” declares Raja Balasubramanian. A demand sparked by having spent three days rationing one can of water at a friend’s house.

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