N Nandakumar, President of CREDAI - Tamilnadu, Chairman of Committee on Affordable Housing - Credai National and Managing Director of Devinarayan Housing & Property Developments Pvt Ltd, speaks to K Ramanathan on various aspects of luxury housing in Chennai and real estate investment scenario in the southern metropolis.
Excerpts:
- What is the trend of luxury residential real estate in Chennai?
The trend for Luxury Real Estate in Chennai is continuing to be on the ascent due to the fact that this segment has significant demand as against the qualitative and quantitative supplies currently available. This trend is likely to continue with adequate patronage from the affluent section of the society who would like to live in the up market residential areas within CBD areas in Chennai.
- What are the ingredients of the luxury housing?
The basic ingredients for luxury housing shall be the prime locations, low density developments with world class specifications, features along with dedicated amenities coupled with hi tech security features.
- What is luxury housing - a builder's perspective?
From a builders perspective luxury housing signifies lifestyle that is comparable with global standards at the same time the product shall make a statement for the end-user signifying an epitome of luxury to the buyer.
- What are the hotspots of luxury real estate in Chennai?
South Chennai is predominantly a preferred destination for luxury homes namely the areas such as Boat Club, OS Gardens, RA Puram, Alwarpet, Kotturpuram, Adyar. In Central Chennai certain pockets on & off Nungambakkam high road, such as Rutland Gate, Wallace Garden, Sterling Road, Haddows Road are established hot spots for luxury real estate.
- Are luxury housing projects more profitable than other types of homes?
Luxury housing projects are profitable ones compare to other residential projects because of high cost per dwelling unit and hire margins available in these products. However there are limitations on availability of large land parcels resulting in low-density big-ticket products, which may not provide scale and visibility to the developer as available in large-scale cluster housing developments.
- What do you think about the introduction of 2% registration charges for new homes in Tamil Nadu?
The two percent registration charges imposed by the Tamil Nadu government towards the construction agreement will bring in better title to the apartment buyers as against the present scenario wherein the buyer gets a registered document only for the UDS of the land. The overall title hygiene is better assured when both are registered documents. The additional cost as a result of this registration is a burden on the homebuyer. In a volatile economic situation this could be of adverse impact on the buyers purchase decision is something to consider about the timing of this act being brought in by the government.
- Is it the right time to invest in properties in Chennai?
Historically the South Indian Property Market has been a stable market for Investment. The major criteria being the absence of speculative investor layer in residential developments coming early into the project and cashing out when the project is nearing completion. Secondly, the demand supply position continues to be inverse as there is no adequate inclusive stock creation except for aberrations in the stocks catering to the creamy layer.
Affordable housing projects are at their nascent stage and in the sunshine phase in this part of the Country. Once the momentum picks up in such stock creation and when the gap between supply and demand narrows down, we will get the exact feel of any volatility from time to time.
Currently the pattern is not so and due to the sensationalisation of adversities in this sector by some vested interest and the media has created a pent up situation, which is not the actual position. If you may observe there is no drop in prices as because of the surging input costs and delayed decisions by prospective buyers will only lead to paying up more price for the same asset.
Therefore it is the right time to invest in the property market and there are chances for getting better deals from projects which are cash strapped and to enable better cash flows there could be some rebates etc to the advantage of the prospective buyer.
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