Thriving in Suburbia
Developers are tapping into suburbs to house IT and industrial workers
In real estate circles, Chennai is known as one of India’s “stable residential markets”. Though the city witnessed a drop in sales of up to 33 per cent in 2013, affordable housing has shown great potential.
As the buyers who invest in real estate to hedge against inflation hold back, Chennai is seeing more people buying houses to live in. Sensing this, realtors are entering the affordable housing segment in 2014 in a big way.
“In Chennai, the skilled, industrial workers are far higher in number than the more visible IT professionals. And it is their housing needs that have sparked the boom in affordable housing,” says Green Home Group’s G. Gnanasehar Devadason. As of now, however, 97 per cent of his buyers are from IT sector.
Since prices in Chennai’s prime areas are rocketing—sales in central Chennai dropped by over 49 per cent in 2013—most of the affordable housing projects are coming up in suburbs such as Sriperumbudur, Oragadam, Chembarambakkam and Siruseri. Industry insiders say most underconstruction units are in south and west Chennai. “Suburbs are more affordable. With cheap land, buyers as well as developers profit,” says R. Ramachantran, chairman and managing director of Om Sakthy Builders, which is constructing the Om Sakthy Eden project in Kundrathur.
Suburbs though come with their own problems. For instance, poor public infrastructure and connectivity in Siruseri, whose projects can accommodate 2.1 million people, put off many prospective buyers.
Affordable homes in the suburbs range from Rs 15 lakh to Rs 20 lakh. Arun Excello and BSCPL are major players. The former’s compact homes in Padappai start from Rs 10 lakh.
“We introduced affordable microtownships on this stretch with projects such as Adair, Adora, Adena and January,” says T. Chitty Babu, chairman and CEO of Akshya Pvt Ltd. They hope to redefine budget homes with their upcoming project ‘Youniverse’.
Despite this boom, Chennai Metropolitan Development Authority estimates that the city may face a shortfall of 800,000 housing units in the next 15 years. But developers are confident that rise of affordable housing in the suburbs will fill the gap.