A Guide to Real Estate Investment in Chennai

Chennai, Tamil Nadu, 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.

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 continually fuel demand for residential properties, particularly in proximity to these burgeoning industrial clusters. Capitalising on this demand presents a lucrative opportunity for property investors in Chennai. Brigade Icon is an exquisite addition to the city's skyline. Nestled strategically in Mount Road, Chennai, amidst leisure and entertainment hubs, this newly launched integrated lifestyle enclave that offers an array of opulent living options

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 in Chennai 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 utilization of the site you have purchased.

• Legal Due Diligence

  Before finalizing 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 Old Mahabalipuram Road are popular choices due to their strategic locations and infrastructure.

Employment Opportunities in Chennai: Your Gateway to Job Options

Chennai has earned its reputation as the "Detroit of South Asia" and there are several promising employment opportunities. Discover the job scene in Chennai – what industries are booming, what jobs are in demand, and where your career could soar. Learn about the opportunities that make Chennai a great place to work and build your future. Here's a glimpse of the avenues waiting for your talent to shine.

Information Technology (IT) Hub:

• Software Development
• Consulting
• Digital Services

Automobile and Manufacturing Sector:

• Engineering
• Production
• Logistics

Healthcare and Biotechnology:

• Healthcare Professionals
• Researchers
• Biotechnology Experts

Finance and Banking:

• Banking Operations
• Finance Management
• Investment Analysis

Education and Research Institutions:

• Teaching Positions
• Research Opportunities

Market Demand and Supply in Chennai: Your Guide to Buying a Home

Get the lowdown on Chennai's real estate – understand what kind of homes are available, what people are looking for, and how it all affects your home buying journey. We break down the basics to help you make sense of the housing market.

Top Reasons to Invest in Chennai: Making Smart Home Investments

Average Appreciation: Where Your Property Value Grows

• Find out which neighbourhoods are seeing the biggest boost in property values. Get the scoop on areas where your investment is likely to grow over time, so you can make a smart move.

  Monthly Rental Insights: Renting in Chennai Made Easy

  
  Explore the rental scene in top Chennai areas. Know how much you might pay for rent, what factors influence prices, and what to look for when renting a home in this vibrant city.

  Average Price per Square Feet: Understanding Home Prices

  
  Break down the cost of homes in Chennai. Learn about the average price per square foot in different parts of the city, so you can budget smartly and find a home that fits your pocket.

Source - 99 acres

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:

• Medavakkam

  Medavakkam is a prime investment option as 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

  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.

• Anna Nagar

  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 Chennai. The residential complexes feature plush amenities and ample living spaces. The features invite the attention of individuals looking for permanent homes.

Conclusion

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.

FAQs

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.

What are some of the trending localities to invest in Chennai?
Velachery, OMR (Old Mahabalipuram Road), Tambaram, Porur, and Sholinganallur are emerging as popular investment choices. Renowned for their robust infrastructure, close proximity to educational institutions, healthcare facilities, shopping centres, and a thriving rental market, these localities are gaining attention among potential investors.

What are the pros and cons of investing in Medavakkam?

Pros:

Medavakkam, a well-known locality in Chennai, stands out for its convenient transportation options, including accessible bus and metro services. The area boasts excellent public transportation, with readily available cabs, autos, and nearby metro connections. Furthermore, Medavakkam features numerous green spaces and well-maintained parks, contributing to its appeal as a clean and hygienic residential area.

Cons:

Medavakkam faces challenges with the absence of nearby schools and hospitals, leading to concerns about accessibility. Traffic congestion is a significant issue, and the area experiences elevated pollution levels, impacting air quality. Water scarcity is prevalent, and the lack of street lights poses difficulties for night-time driving. The place doesn't have good infrastructure, with problems like not enough drainage, water supply, and sewage facilities.