Chennai’s real estate market is mainly driven by businesses like information technology, allied services and financial services, says Badal Yagnik, Managing Director – Chennai and Coimbatore, Jones Lang LaSalle.
However, suburbs of Chennai faces the problem of lack of social infrastructure to keep the city-based properties attractive. In the coming months the trend will change with increased move to suburbs as land prices in the city spiral.
Yagnik points out in a report, that apart from IT/ITeS and financial services, Chennai’s economy is driven by the automotive, manufacturing, telecom and semi-conductor sectors. However, the residential property market is primarily driven by IT / ITeS, which is concentrated in the South and West suburbs resulting in focussed demand and supply.
More than 70 per cent of the real estate supply is in these locations. Unfortunately, these suburbs still lack social infrastructure and land availability is limited, resulting in inadequacy of social facilities like schools, malls, multiplexes, restaurants and supermarkets.
The demand for homes in Chennai is still for city-based properties. But due to limited availability of suitable plots, land prices have increased manifold in the city, where demand for residential units has always far exceeded supply.
This has made city-based properties expensive for new buyers.