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Substantial increase in rental rates in Chennai
Posted on: 19/Jan/2019 7:14:23 PM
In 2018, the overall rental rates has increased, thus making the Chennai city stand next to Mumbai, says a survey conducted nation-wide.
The study further stresses on the fact that there is annual increase in inflation by 18 percent in Mumbai.
According to stakeholders, it is due to the insufficient real estate development in the city that has resulted in such a rental inflation, particularly in residential areas (the localities where people look for rental houses so that they have better access to schools, colleges and work spots).
In his note about this, Chairman of National Association of Realtors India (NAR-INDIA) Mr. Abdur Ravoof says such a rental inflation is evidently observed in areas such as Nungambakkam, Egmore, and Anna Nagar. Coming on to the heart of the Chennai city, there are hardly any residential project. Most of the rental house seekers look for residential areas here due to close proximity of schools and colleges and office. This has ultimately resulted in increase in rental rates, he underlines.
Demand vs Supply
Chennai Corporation have made a property tax assessment pertaining to residential properties and have discovered that in specific wards in the central areas of the Chennai city, there are very few houses developed as compared to many other wards in areas like Sholinganallur, Perungudi and Ambattur.
Dip in apartments
There is substantial dip in the total number of flats constructed between 2012 and 2018, says N. Mathavan, the Urban planning and disaster management expert. In fact, in a few localities, there are apartment unsold. Homes on the other hand have constant demand. There are new office spaces being developed and there is constant demand for residential apartment. There is not much interest shown towards buying second house. The real estate industry is looking for revision in GST rates and rules for common buildings, he adds.
Mostly in Chennai city close to 49% people choose to go for rental accommodation so that they feel comfortable to commute to workplace. About 44 percent of people zero in on rental housing so that it is safe to reside. About 67 percent of people say they stay as pair with their spouse and just 9 percent of the population resides with their parents and 7 percent stays with friends and merely 5 percent reside all alone.
As far as renting is concerned, about 55 percent of Chennai tenants say they wish to find a house without paying any brokerage. About 29 percent of people get a rented house through reference of friends and family. And there is 19 percent population that figures out rental houses via real estate websites. Through brokers, just 8 percent people seem to find a rented house.
Stress on water supply
The study further highlights the fact that there is concrete need for improving water supply infrastructure. Among the top priorities of Chennai tenants is proper water supply.
When set against other cities like Bengaluru and Mumbai, in Chennai, the overall security deposit cost is high. Among all the tenants, about 57 percent of them desire to own a house.
