CHENNAI: The real estate sector in Chennai is showing positive signs as sales is gaining pace during the festival season. With continuance of low home loan interest rates, high demand for home ownership and residential launches gaining momentum, developers are hoping to cash in on the positive sentiment.
Although developers are facing issues like the rise in raw material prices, which include steel, cement, blue metal and m-sand, the sentiment is positive post June when the lockdown was relaxed after second wave of Covid-19. "During the last four months, our sales have gone up by 20 per cent. We have set a target of sales worth Rs 3500 crore by the end of April 2022," says Vimesh P, Vice-President of marketing, Casa Grand, one of the largest developers in Chennai.
Festival season has always been good for the residential real estate sales across India. It will trigger buyers to make their decisions to buy new homes, which they were holding on for some time. Now we have good options in the market with attractive offers by developers will again act positively while the raising material cost is of a concern," says A Shankar, Chief Operating Officer, Strategic Consulting, Jones Lang LaSalle (JLL).
Srinivas Anikipatti, senior director – Tamil Nadu and Kerala, Knight Frank India says that plotted layouts are doing well in Chennai. "Everyone has got disposable income and natural sentiment in Tamil nadu is to invest in gold or real estate," he says. Covid-19 has shown the bottom of market and it had made sure what people should do with their investment. He said the price will go up only when the inventory reduces. Chennai had an inventory of 36,509 homes in March this year.
According to Knight Frank Real Estate Sentiment Index, the real estate sector in India has seen a sharp rise in activities especially in third quarter of 2021. Office sector recorded a year on year rise of 168pc in office leasing activities recording total of 12.5 million square feetof office absorption. The residential sector also continued its forward pace with top markets recording sales of 64,010 units in July to September quarter, a rise of 92pc year on year
But then the residential prices is likely to shoot up after Deepavali in Tamil Nadu. Suresh Krishn, President of Confederation of Real Estate Developers' Association of India (CREDAI) Tamil Nadu told Express that the developers would increase the price by 7.5 per cent per square feet from November if the price of raw materials don't come down by then.
This has also been echoed by Vimesh, who says the price rise will depend on project to project. He says Casa Grand may be increasing the price anywhere between Rs 250 to Rs 500 per square feet after November. The major concern for developers is the unavailability of raw materials and the price surge in steel and cement, says S Sridharan, chairman, Urban Development/ Affordable Housing Committee, Confederation of Real Estate Developers' Associations of India (Credai) National.