The changing plot – from flats to houses

As land prices soar and demand for housing continues unabated, making apartments and high-rise buildings imperative in the city and its periphery, there is a thriving market for land and individual houses. Not just in the segment that can afford to shell out several crores to buy an individual house but also for those on a budget.

Builders are targeting the manufacturing sector with offerings of individual or duplex houses priced up to Rs 25 lakh in the suburbs, and promoting plotted developments as an investment option.

Developers, including those focused on building apartments, are active in plotted developments and individual or duplex houses in the mid budget – up to Rs 20-25 lakh. But buyers may not necessarily get a 2,400-sq. ft plot, the standard one-ground-plot that Chennai residents were familiar with till a few years ago. They now settle for a more budget-friendly one-fourth or half ground plots.

Another market here is the demand for ready built-up space on the plots, individual houses, duplexes or ground and first floor with four living units. Projects emulating the traditional Chennai houses of ground-plus-one-floor rather than the ground-plus-multiple-floor apartments that have come into vogue in the last decade. At least in duplexes, as in individual house the buyers get a distinct piece of land, they can call their own and not an undivided share, say developers.

There is a case for investing in plotted developments and trying to maximise the land share in a built up space. It is land value that appreciates, often up to 30 per cent a year, while the building only depreciates within a few years.

But there is a clear distinction between the segment that invests in a plotted development and that looking to own a piece of land along with a house, says V.N. Devadoss of VGN Enterprises, which has for decades been a layout developer in Chennai and its suburbs and more recently got into apartment and township development.

Those buying plots in a layout development are primarily investors who hope to exploit the rising price of land. For instance, he recalls a layout he sold in Mogappair, past Anna Nagar. In 2001 a plot of land there was about Rs 7 lakh today there are no sellers for offers up to Rs 1.5 crore.

Land prices

But buyers need to be cautious about selecting the location and ensuring that the statutory approvals are in place. Buyers should bet only on layouts that have been approved by the Chennai Metropolitan Development Authority, if it is in the city limit, and those approved by the Department of Town and Country Planning elsewhere, he says.

The key is to pick a well-connected spot preferably linked by road and rail. Plotted developments with maximum potential for appreciation are happening up to 30-40 km to the South of the city.

On the East Coast Road and the Old Mahabalipuram Road land cost is high and lack of rail-link a handicap. On the GST, a National Highway with rail link, developments are attractive up to 50-60 km and to the West of the city up to 40 km where there is a rail link. For instance, buyers can get land in Avadi at just about a third of the price in Tambaram, he points out. They will still be able to reach the heart of the city within one hour by train.

VGN is planning a low-budget layout near Maraimalai Nagar to the South, near Chengalpat, at about Rs 5 lakh a plot targeting the budget segment, he says. 

R. Ramachanthran, Chairman and Managing Director, Omshakthy Homes Pvt Ltd, says gold jewels and land are the traditional long-term investments in the South. Plotted developments are moving well in places located close to industrial hubs. Development in Avadi, Padappai, Ambattur have attracted buyers’ interest. Developments to the South of Chennai up to Chinglepet and to the West up to Kanchipuram are in demand.

Omshakthy is set to launch a layout in Padappai and duplex twin houses in Avadi. The layout project in Padappai, close to the industrial hubs of Oragadam and Sriperumbudur, will offer 1,500-1,800 sq.ft plots priced around Rs 7.5 lakh - Rs 10 lakh.

M. Arun Kumar, Managing Director, Casa Grande, says investment in land has consistently paid off for the developers and the buyers as they yield the highest returns.  He sites the example of a project he promoted in Ponmar, to the South of the city past Medavakkam, 2-3 years back. Land in the plotted development sold for about Rs 800 a square foot and now three years later it has appreciated to over Rs 1,400.

A 12 acre layout, villa project, was launched at about Rs 25 lakh in Ponmar, he said.

The city is continuously developing and there is a keen demand for land and housing upto Thiruvallur and Chinglepet to the west and south.

Pon Ravichandran, Director, Greentree, which is planning a 47-acre township at Thiruvallur with two and three BHK houses, says these are not the multi-storeyed apartments but more like individual houses. Two units of 3-Bedroom-Hall-Kitchen on a one-ground plot or four two-bedroom units priced from about Rs 20 lakh, they are targeted at employees and executives in the manufacturing sector. Nearly 3,000 houses are in the works. The location is about eight km from the industrial hub of Sriperumbudur and Oragadam and four km from Thiruvallur, which has a railway station.

The company is planning to use a pre-cast technology for construction to speed up delivery and keep costs down and speed up delivery. It is crucial for buyers to invest in emerging destinations that are well-connected thriving industrial and commercial centres. 

The company is also looking at plotted developments. One, a 500-acre development is in the pipeline, he says.

balaji.ar@thehindu.co.in

COMMENT NOW