Slowdown in Chennai property transactions, Will the price?

The number of property transactions in Chennai and its immediate neighbouring districts has come down by 10 to 15 per cent in 2007-08.

In 2006-07, the three zones within the city registered about 3.7 lakh documents and netted about Rs.1,384 crore in terms of registration charges and stamp duty. Of these transactions, about 80 per cent was property related. The second half of 2007-08 witnessed a slowdown. Without exception, transactions in all the three zones of city – North, South and Central and the neighbouring Kancheepuram and Chengalpattu districts have come down. South Chennai was the worst hit, a drop exceeding 15 per cent. Chengalpattu followed this with more than 10 per cent. In 2006, these two districts along with Kancheepuram registered high growth in property transactions across the State.

Prakash Challa, President, Confederation of Real Estate Developer’s Associations of India (CREDAI), Tamil Nadu confirms that the property transaction and sale of apartments have come down in the recent times. He attributes the high interest rate, rise in the construction cost and additional charges as reasons. The steep rise in land prices and reduced funding for real estate projects have added to the situation, he said.

In spite of the fall in transaction, the revenue generated for the Government in terms of stamp duty has not come down. An upward revision in guideline values, between 50 and 150 per cent, which have been in force since August 1 last year, helped improve revenue collection.

Src: The Hindu

4 Comments

  1. Real Estate Chennai

    Real Estate transactions have fallen throughout the nation, especially due to the slow down of the economy and high rate of inflation, which pushes up prices of basic commodities as well as construction equipment.

  2. Guruprasad

    The upward revision in the guideline values has acted as a dampener for the demand from the speculative segment of the Real Estate market. It appears that this segment is slowly coming out of the sudden surge in the transaction cost due to this upward revision.

    The restrictions imposed on the ECBs for Real Estate Projects have also choked the funds in flow.

    The Chennai Real Estate market appears to have stabilised,

    There is plenty of scope for another surge upward, once the negatives are out of the way, particularly in those areas which have not participated in the last rally. One example of this is areas in and around Tiruvallore, where one finds lot of development in infrastructure and connectivity.

  3. ram

    It looks like the whole of Chennai from central to close to 60 km radius to be unreachable for the average middle class.

    There used to be some areas within Chennai where the prices are extremely prohibitive, that was fine. But now the entire Chennai and suburbs with in the radius of 30 km is out of reach.

    Not sure how much more money the real estate developers want, looks like the anticipated greediness is still there among those who with large land banks still looking for another upward trend.

  4. Ganapathy

    It will down further. For another 2 years slow down will continue

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