A Guide to Real Estate Investment in Chennai
Chennai is home to India's second-largest IT and Business Process Outsourcing (BPO) sector. Thousands of professionals throng to the city every year to capitalise on the brimming job opportunities. The city is also known for its social infrastructure, transport system, scenic beaches and a rich cultural heritage. All the factors have a cumulative effect on making Chennai a haven for real estate investors.
Do these aspects convince you to explore this part of Southern India as your residential address? If yes, here is a comprehensive investment guide for you to choose the right residential project in Chennai.
Reasons Why You Should Invest in Chennai
With a booming economy, infrastructure and property options, Chennai has seen residential demand growth. The January - June 2023 Knight Frank report cites a 3% increase in sales of houses in the city within the first quarter of this year. It makes the city one of the best investment choices.
The Continuous Growth of the City
The capital city of Tamil Nadu is undergoing continuous expansion and progress. This growth is motivating countless enterprises and sectors to open their shops in the area. As a result, it is multiplying employment prospects in the area.
The Market of India project is one such instance. It is an upcoming expansive wholesale and retail marketplace that will disrupt Chennai's business landscape. Projects alike will add steam to Chennai's swiftly evolving urban landscape. Such initiatives will bolster the potential of generating considerable returns over time.
Continuous Infrastructure Development
One of the major factors driving real estate investment in Chennai is its well-planned and growing infrastructure.
The city offers an improved transport system with metro connectivity, road networks and airport. Upcoming projects such as the proposed phase 2 of the Chennai metro rail will cover about 120 km with 128 stations, allowing people to move easily across the city.
Center of Commercial Activities
Chennai's emergence as an IT hub has reshaped its real estate landscape. The city has numerous IT parks and technology centres that attract a young and skilled workforce. New developments like the Aerospace and Defence Park in Sriperumbudur have further strengthened the industrial ecosystem. It has emerged as the centre of aerospace and defence manufacturing services.
Bustling commercial activities create a consistent demand for residential properties, especially near industrial hubs. People can tap into this demand by investing in property for sale in Chennai.
Presence of Premier Educational Institutions
Chennai is renowned for its educational institutions. The presence of these institutions attracts students from all over the country and abroad. Real estate investors can tap into this by investing in student housing or rental properties for the academic community.
A Melange of Scenic Beauty and Cultural Heritage
The city is on the Coromandel Coast, nestled along the shores of the Bay of Bengal. Alluring coastal settings with exquisite beaches makes Chennai a magnet for residents and tourists alike.
The city’s rich cultural heritage, history and vibrant arts also contribute to its real estate appeal. Areas like Mylapore, steeped in tradition, offer unique investment opportunities in heritage properties. The burgeoning tourism industry also provides avenues for short-term rental investments for homeowners.
Unrelenting Efforts by the Government
Tamil Nadu's government, alongside the Chennai Metropolitan Development Authority (CMDA), has multiple implemented development projects. It has fueled the real estate worth of the city. The projects include provisioning transport systems, establishing special economic zones and others.
With an aim to promote seamless traffic movement in the city, the local government has set in motion road infrastructure projects. Some of these initiatives include constructing a flyover connecting Sardar Patel Road and Rajiv Gandhi Road. It includes a subway in the Medavakkam Road-Inner Ring Road junction stretch. The 3.14km long elevated corridor on Mount Poonamallee Avadi Road will ease traffic flow at Ramapuram and Mugalivakkam junctions.
Factors To Consider Before Purchasing Property In Chennai
Real estate investment is a milestone decision for anybody. It warrants caution and extensive research. Here is a list of factors you must consider if you are thinking of a house to buy in Chennai:
Check the Floor Space Index
The Floor Space Index (FSI) is a critical parameter to consider if you want to invest in a plot in the city. The term denotes the total area available for constructing a house. It is important to note that the plot's FSI should be high. A higher FSI enables optimal utilisation of the site you have purchased.
Legal Due Diligence
Before finalising any property deal, it is imperative to conduct thorough legal, due diligence. Ensure that the plot you have your eyes on is not designated as agricultural land.
Insist on obtaining the original sales deed and the original copy of the property agreement. The documents come in handy to prove your legitimate ownership of the plot in the future.
The Chennai government has mandated the legal ownership of any plot or property. This makes it necessary for builders to adhere to all relevant regulations during ownership transfer.
Get a Heads-up on the Taxes Levied on the Region
Areas within Chennai have different fee structures for various services. These charges encompass elements like land, water and power taxes.
Before investing in a property, it is necessary to know the annual fees required of you.
Check the Property's Location
The importance of location cannot be overstated when it comes to real estate. In Chennai, different neighborhoods offer varying convenience, amenities and accessibility.
Consider proximity to your workplace, educational institutions, healthcare facilities and recreational areas. Areas like Adyar, Medavakkam, Anna Nagar and OMR are popular choices due to their strategic locations and infrastructure.
The Top Areas to Invest in Chennai
Chennai offers many real estate investment options for residential and commercial purposes. Here are some of the top localities that have emerged as prime destinations for real estate investment.
The area excels in connectivity, closeness to employment hubs and social infrastructure. It encompasses everything that makes for a functional and convenient living environment.
Medavakkam is situated in the southern periphery of the greater Chennai metropolitan area, between the OMR (Old Mahabalipuram Road) and GST Road (Grand Southern Trunk Road) stretch. The locality is at a short distance from the Special Economic Zone (SEZ) along the Medavakkam-Sholinganallur Road. Its vicinity to the IT corridor of OMR adds value to this place as a favourable residential hub.
The location brings residents close to all the necessary social amenities. Prominent healthcare centres such as Dr Kamakshi Memorial Hospital, Deepam Hospitals, etc. address the medical needs of the locals. Reputed educational institutions like St. Thomas Matriculation School and SRM University, among others, assure a high-value educational system in Medavakkam.
The infrastructure of Medavakkam is undergoing a continuous overhaul. The under-construction unidirectional flyover, an initiative taken by the state highways department and Chennai Corporation at Medavakkam, will curb the traffic congestion from OMR to Great Southern Trunk Road. It is expected to facilitate faster commuting to Chennai International Airport and Velachery.
Old Mahabalipuram Road (OMR)
The area is high on the radar of real estate investors thanks to its fast-growing IT/ITES sector. OMR’s burgeoning commercial activities have resulted in infrastructural development, catalysing the area's land value.
As the Chennai IT nucleus, OMR is home to prominent IT parks such as TECCI Park, Tidel Park and SIPCOT IT Park, among others. No wonder the area is garnering a huge housing demand among professionals, spurring its real estate value.
The area boasts immaculate and expansive roads, connecting the locality with the rest of the city. Arterial and link roadways such as the Medavakkam-Karapakkam Road, Thoraipakkam-Pallavaram Radial Road and the Maraimalai Adigal Bridge-Irumbuliyur Road enable easy commute across the city.
Multiple infrastructure development projects in the pipeline will ease connectivity in OMR. Some initiatives include the Chennai Peripheral Road. It will join four national and eight regional highways and the Chennai Metro Rail Second Phase covering the stretch between SIPCOT and Madhavram.
Adyar is the posh and modern avatar of Chennai. The area hogs the real estate limelight due to its proximity to the city's industrial and IT zones.
The locale is one of the most sought-after areas for residence in Chennai. It is because of the area's remarkable connectivity to the central residential hubs.
The vibrant tapestry of Adyar is dotted with a collection of temples like Mylapore, Triplicane and Mandaveli. T-Nagar, Nungambakkam and Alwarpet are the hotspots for culinary delights. Shopping havens and the entertainment hubs of Kotturpuram, Besant Nagar, Thiruvanmiyur, ECR and OMR make for a great quality of life in this area.
Residing in Adyar grants the unparalleled advantage of navigating the city for many needs.
Originally known as Mullam village, Anna Nagar has emerged as one of Chennai's prime residential hotspots.
The network of roads is the unique selling point of the area. Drawing inspiration from the Western world, the streets are laid in a matrix format where the lanes are perpendicular and parallel to each other.
The Anna Nagar railway station and the CMBT bus services enable seamless connectivity from the area to the rest of the city.
Residents of Anna Nagar enjoy an excellent social infrastructure with a range of top-notch amenities. Noteworthy educational institutions within the area include Chennai Public School, Chinmaya Vidyalaya, Jaya Maaruthi Sangeetha Vidyalaya and more. Brigade Xanadu located in Mogappair West is 5 minutes away from Anna Nagar.
Prominent hospitals like Aashiana Hospital, Madras Medical Mission Hospital and Frontier Lifeline Hospital cater to the locals' general and emergency medical needs.
Anna Nagar is home to various malls, including the Golden Shopping Centre, Indira Arcade and Ampa Skywalk Mall, among others.
Builders have capitalised on the steady growth of Anna Nagar and developed luxury homes in the area. The residential complexes feature plush amenities and ample living spaces. The features invite the attention of individuals looking for permanent homes.
Chennai's real estate market presents lucrative investment opportunities, economic stability and cultural richness. Various factors make Chennai a prime location for real estate investment, from the city's booming IT sector to its historic charm.
As the city develops, investors can capitalise on short-term rental income and long-term property appreciation. Like any investment, thorough research, due diligence and consultation with real estate professionals are essential to make informed decisions that align with your financial goals.
Is Chennai good for real estate?
The real estate sector in Chennai has undergone remarkable expansion, establishing itself as one of India's most flourishing markets. The city's robust economy, progressive infrastructure enhancements and burgeoning industrial domains have all played pivotal roles in fostering the advancement of the real estate arena.
How is the real estate market in Chennai now?
The real estate landscape in Chennai exhibits remarkable stability. The city boasts extensive development, exceptional infrastructure and top-tier amenities. The consistent and favourable return on investment makes it an appealing destination for real estate investment, particularly in the residential sector. Given the constant demand for residential properties and communities, investing in these areas is a reasonable choice.
What is the future of real estate in Chennai?
The constant upheaval of the public transportation infrastructure, including the construction of flyovers, roadways and metro rails will facilitate easy commuting, drawing people in the city searching for a convenient living. It will fuel the housing demand, boosting the area's real estate value in the future.
What are the advantages of living in Chennai?
The thriving job market, excellent public infrastructure, rich cultural heritage and prominent healthcare centres and educational institutions are some advantages of residing in Chennai.
Is Chennai costlier than Bangalore?
Chennai is more budget-friendly than Bangalore, particularly in housing, food, entertainment and transportation categories.
How do you buy a residential property in Chennai?
Ideally, you should first determine the budget and arrange for the finances. Make a list of your and your family's preferences and start zeroing in on locations accordingly. Once you identify the area, explore residential properties and request onsite site tours to see if the offerings suit your lifestyle.