Chennai is in a position to emerge as a next realty tech hub after Bangalore but the increasing property prices are deterring its path. The city is witnessing a rising demand for economical qualitative office space and housing. Chennai property prices are swinging as the real estate values are increasing at some places and decreasing at others.
Chennai properties at old Mahabalipuram road are witnessing a downfall in transaction rate. Of the total 4 million sq ft of space only 1.7 million sq ft were taken on rent and the vacant space accounts for about 11% as per C&W report. Reason cited by the property dealers in the city is these projects are overpriced and are not able to find the actual buyer.
Most of the investor entering into Chennai real estate market is coming with the mindset to have an economical space in the city. The higher Chennai property rates are leading to high vacancy rate as the investors are not ready to buy the space at the offered price. It is also seen that most of the transaction happened in the last six months mainly comprises of rent deals instead of purchase.
Another problem that has resulted in lesser number of transactions is the Tamil Nadu government policy which does not allow IT and Software Technology Parks (STP) units to lease space to non IT companies. This has further led to vacancy as the potential IT buyers are less as compared to the other firms.
In residential sector also to buy an apartment in Chennai is not an easy deal. Chennai Property Prices have gone phenomenally high at the key residential places reducing the number of transaction deals.
Chennai property prices vary from places to places as well as from dealers to dealers because few developers are ready to sale their property at lesser price in relation to the market price.
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