Rental Values on Rise in Chennai

By: George Gonigal

Rising real estate prices make land a super-expensive commodity in Chennai. This is true not only for the plots or built -up flats and apartment, even the rental rates are shooting up. Chennai real-estate is witnessing a 20-30% increase in residential property rents.

Prime residential areas like Velachery and Sholinganallur, where the average rental rates for 3 BHK were Rs 4,000-6,000, witnessed the average rental rate of Rs 6,000-15,000. Property rates in these areas escalated from Rs 3,500-4,200 per sq ft from Rs 2,500-3,000 sq ft.

This trend was replicated in other residential areas like Kalakshetra colony and Ramapuram as well. Here where the rent shot up to Rs 5,000-12,000 per sq ft from Rs 4,000 - 6,000 per sq ft. This has largely been triggered by the favourable markets and increasing business activities that are drawing working population to the city.

Representatives from brokerage firm Asvinifoundation inform that Chennai Real estate is witnessing unprecedented supply but still the demand is very high. "In the past decade, umpteen residential projects have been announced in Chennai but only few have seen the light of the day. Many real estate developers announce projects, make a lot of money in the pr-sale and then forget about the projects. As a result, a lot of projects are 'about-to-be-completed' or 'still-in construction'. This has caused a surge in the rental values in the Chennai property market," informs the source.

However, rising rental spell good returns for the investors. People who have let of their properties are now making good money out of it. Of late, many private real-estate developers have announced their projects for Chennai. DLF and Purvankara are prominent among the developers. In fact DLF has even announced an economical residential complex to lure the users. This is the company's first foray in the market. However, most of these projects have just been announced and will be completed with in the near future only. Hence, the situation of the real estate market remains unchanged.

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