Lessons from Chennai floods: Why home buyers should know geography

Rajalakshmi Nirmal | | Updated on: Mar 10, 2018
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North/south Chennai or the OMR stretch, were badly hit by flooding during the recent rains

Many of Chennai’s ‘hot’ real estate hubs where people made a beeline to invest in the last few years wear a deserted look today. Most of these places, in north/south Chennai or the OMR stretch, were badly hit by flooding during the recent rains and residents have moved out.

Did you know that much of north Chennai has been actually built on flood plains and wet lands? Apartments that were sold as ‘lake view’ villas in some of these places, such as Perumbakkam, have been swallowed up by the lake. The OMR-ECR stretch is built on the Pallikaranai marsh. Villivakkam’s SIDCO Nagar, which has housing board and industrial complexes, is in the middle of a tank bed. Research by the Centre for Environmental and Water Resource Engineering of IIT Madras two decades ago showed that Chennai and adjoining areas had about 650 water bodies. Today, only a fraction of those exists.

Lalit Mohan Sharma, Director, Adaptive Technologies, SM Sehgal Foundation, who has been working on water-related issues for more than two decades, says it is the increase in real estate prices and the consequent increase in demand for land in metros which has resulted in encroachment of lake beds.

Many people BusinessLine spoke to seemed to be unaware that the area they reside in is close to a lake or is built on wetland. When buying an apartment, people tend to overlook safety aspects. While the harm has already been done, the insights shared by some of the affected people can be an important lesson for others.

‘Buying a house was a mistake’

Bose Muthu Kumaran, who works with a financial services company in Chennai, bought an apartment in CTO Colony, Tambaram, two years ago. During the recent rains, water entered his apartment. Within 10-15 minutes the water level increased substantially, and it almost reached the first floor. Though he and his family were evacuated from the apartment by boat, thanks to a rescue team, he couldn’t move his belongings.

Now he is staying with his friends. “I visited my house a few days ago. The water has receded, but the entire place looks deserted. Not many people are back, there is a lot of garbage on the road and there is no power. I will move back to the apartment in a few days, but it will be never be the same for me or my family in that house,” Bose says.

The apartment was bought on a loan. Though Bose now wants to move out of the house and shift to a safer place, he says he can’t afford it. “My EMI is running, I know I will end up paying almost ₹50/60 lakh for my loan of ₹35 lakh for this apartment. Now, thinking back, it seems like madness. I could have paid rent and stayed at a better place.”

But, didn’t Bose know that the place was close to Chembarambakkam lake and during heavy rains there is a flood risk?

“I come from Madurai. I didn’t know this place’s history. Before buying the house, I went around to see neighbouring areas. Sri Sai Nagar and Goodwill Nagar, which are just across where I stay, looked posh with many individual villas. So, I thought the place was safe. I was told by people already residing in the area that it was normal for water stagnation of up to one foot during rains. But because my building was built a good two feet above the road, I thought there would be no problem,” rues Bose.

Encroachment on flood plains is not limited to the Chennai metro alone.

Research by Sushmita Sen Gupta, Deputy Programme Manager with the Centre for Science and Environment, has thrown up some shocking revelations. She says, “in 1925, 60 per cent of the land area in Mumbai was used for agriculture and was covered by forest. But, by the beginning of 1990, the area had shrunk to half its original size.” The six basins of streams that criss-cross the city had been converted into roads, buildings and slums, she adds.

Similarly, in Hyderabad, between 1989 and 2001, 3,245 hectares of water bodies were lost.

Bengaluru’s 2005 floods which sank the entire city should also be blamed on choked drains, says Sushmita Sen Gupta. “The city had 262 lakes in 1960, but today only 10 of them hold water.”

No ‘second’ home

Ganesan, who stays in a rented accommodation in Pazhavanthangal, Chennai, had to rush out of the house to get to a safer place in the middle of the night during the recent rains.

He owns an apartment in another part of the city, but had moved to this one because of its proximity to the railway station.

“I knew there was a lake over which this apartment was built, but, I still wanted to stay there because it was closer to the railway station, making it easy for me to commute to my office. It rains only a few days a year, when I have some difficulty. Otherwise I was happy with the place. For such a nominal rent, I may not get another apartment.”

Asked if he would buy an apartment in Pazhavanthangal, Ganesan says, “No, not anywhere in Chennai. But I will continue to live here because this is where I work.”

Muthiah, a calm and composed person in the mid-30s who stays in Manali New Town, was also a victim of the floods. He had to move his wife, children and aged mother out of his flooded house.

But he says that the roads and connectivity to the city from the area are good and wants to continue living in Manali. “I will take some precautions. Maybe next time I will build a room on the first-floor.”

Real estate prices may correct

Srikanth, who bought an apartment in Perumbakkam just a few months ago, is not a happy man. His car, kept in the basement parking, his house and all electronic goods and the furniture have been spoilt by the water that flooded his apartment on December 2. “I bought that apartment only in June. They said it’s a lake view apartment, but the entire place looks like a lake now. I don’t want to go back to that apartment; I have bad memories of it now. But if I sell it now, I don’t know if I will get my capital back,” says Srikanth.

After any natural disaster, property prices go down and they stay low for at least the short term, says Kanchana Krishnan, Director, Knight Frank. “People do not think about money or investments immediately, they generally postpone buying decisions after a calamity.”

Post the 2004 tsunami, prices had crashed in the ECR stretch. But today, after 10 years, prices stand much higher, Kanchana points out.

Many property consultants believe that over the next five-six years, real estate prices will skyrocket in Chennai because of better infrastructure facilities. By infrastructure they probably mean the roads, flyovers, SEZs, IT parks and smart cities and not a better water/drain management system; so watch out. In the north-Chennai region, Kolathur, Tondiarpet and Madhavaram are seeing builders sell projects for ₹4,000-4,500/sq ft.

The high-end apartments in these regions are priced at ₹5,000-6,995/sq ft. They are betting on the Ponneri ‘Smart City’ and phase 2 of the outer ring road connecting Nemmilechery and Minjur.

Some of the worst-hit areas in the recent rains are among the expensive addresses in Chennai. Take, for instance, Velachery, where the going rate is ₹9,000-10,000/sq ft, Saidapet about ₹9,000/sq ft and Kotturpuram about ₹20,000/22,000 per sq ft.

Sanity may return to pricing in some of these places, say a few people. But how long the memories of the flood will last, is not known. The only way to check floods in Chennai is to retrieve all major drains, says, Prof S Janakarajan, of MIDS. “Adyar, Buckingham, Kosasthalaiyar, Cooum…they should all be restored,” he adds.

Published on December 13, 2015
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