Chennai builders say lull in activity is temporary

Maya Sampath works in one of the IT companies in Guindy. She and her husband recently bought a house in Velachery. With properties lost and damaged due to torrential rain, Sampath has to start from the scratch. But, she has no plans to sell or move elsewhere.

“It is unfortunate that such a thing has happened but I will not be selling this place as we had to take a huge loan and there is no surety that I will get my capital back,” she says.

Most of the people, who had bought houses in the worst affected areas – Velachery, Mudichur and Old Mahabalipuram Road (OMR) – are facing a dilemma whether to sell the houses or stay for the fear of falling real estate prices. Though the builders agree that sales of new residential blocks could be a challenge, most of them strongly believe this situation is temporary.

Discount offer Sridhar Neelakandan, General Manager, Ramaniyam Real Estate Private Limited, said the scenario for real estate, which was not good to begin with, has become worse after the floods as the public is focussing on getting back to normalcy.

“We are planning to give ₹300-₹500 discount per sq ft to our buyers who are willing to buy the flats immediately,” Neelakandan said.

The company has about 120 unsold flats spread over five projects in Velachery, Siruseri and Sholinganallur. The establishment has already converted three enquiries into deals and is hoping the demand would increase after Pongal.

“This would be the best time to buy a new house when sellers are willing to negotiate. One year down, the prices will shoot up again,” he said.

Impact on rentals Stating that the demand for houses in Velachery and OMR is unlikely to decline, Neelakandan said people will have no option but to come out and buy houses in these areas as there is a huge space crunch in the city. “Buying a house in the city is really expensive. So, people who wish to buy, have to invest in these areas as they are affordable to the growing double-income families,” he said.

Siva Subramanian S, Vice-President - Adyar-Velachery, Hanu Reddy Realtors, a real estate company that offer services like buying, selling and leasing of residential properties, said despite the recent disaster, there has not been any impact on the rentals in Velachery though the sales are little dull. “This is due to its connectivity to IT corridors and social infrastructure,” he said.

Social infrastructure “While the rentals in Adyar are going down, we did not see such a scenario in Velachery. In the northern part of Velachery, which was not affected by flood, the transactions have been good,” he said.

Sanjay Ramanujam, Chief Executive Officer, ZED Habitats, another builder whose project along OMR was affected during the flood, said OMR is one of the few districts with an established social infrastructure for the IT and education hubs. “While there may be reduced enthusiasm in the short-run, there will be demand for quality villa projects in that area that are positively differentiated and reasonably priced,” he added.

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