An insight on renting homes in Chennai

Chennai’s harbor development in the 18th century made it a hub for trade between Europe and India. This metropolitan city was the first one to have a widespread WI-Fi facility and conditional access system for cable television. Apart from these, there are many concepts and implementations that have first been made in Chennai.

The city has also developed as a center of real estate, all thanks to the programs launched by the Government to improve the city’s infrastructural projects. This article provides insights into the rental market of this crowded city.

In Chennai, the capital of Tamil Nadu state, there is a huge demand for 1 BHK flats. People prefer renting flats in areas like Sholinganallur, Old Mahabalipuram road, Adyar, Porur, Kelambakam, Velachery, and Medavakam. Being an old city, there are a number of options to choose from. The average price for renting a 1 BHK flat in this city is Rs. 7500.

Areas like Porur and Adyar offer high-end properties too. In porur, you can rent a luxury segment property in about Rs. 13500 and in Adyar about Rs. 16000 with median values lying at Rs. 12,000 and Rs. 15,000 respectively. You can also find budget accommodations in areas like Kelambakkam and Medavakkam where the average rates are around Rs. 6,500.

Apart from basic 1 BHK homes, you can also find 2 BHK luxury homes in Chennai. People who are planning to settle in the city can opt for 2 BHK flats. It is advisable to look for a two room home in areas like the Old Mahabalipuram road, Thoraipakkam, Sholinganallur, Velachery, and Perugundi. These areas may offer homes that are priced slightly above the average rate of Rs. 12000. Also, there is a lot of price variation seen in areas like Sholinganallur, Velachery, Perugundi and Chromepet. For affordable properties, you can go for areas like Chromepet, Medavakkam and Pallikarana.

People who are looking for 3 BHK luxury homes in Chennai should check out areas like Old Mahabalipuram road, Pudupakkam, Thoraipakkam, and Velachery. The best part is that most of the high localities have their price trends in line. The average price for a 3 BHK flat is Rs. 18000. Homes can be rented in areas like Pudupakkam, Pallikaranai, and Medavakkam at a slightly lower price. You will also find a number of options in the Thoraipakkam, Velachery, and Sholinganallur areas, but with a price range variation.

The rental market of Chennai has seen a lot of fluctuations in the recent years. If you inquire about the property rates in Chennai from any renter, you will surely get a high quotation. But that is the sad truth that the city offers properties at a high price.

Buying or renting properties in Chennai is surely expensive. And even if you are planning to rent luxury homes in Chennai, then you surely know they don’t come cheap. Renting homes in the neighborhood of the city center too is very expensive. Affordable houses to buy or rent are difficult to find in this city.

This is a guest post by Deepak Yewle

Why Uttar Pradesh Government’s focus on roads development and improvement is the step in right direction for realty sector?

Roads are the lifeline of a major growing economy. Not only roads bring people closer by improved connectivity, they also boost trade and commerce. India has second largest road network in the world. National highways in India cover a distance of 79243 kilometers. State highways cover a distance of about 131899 kilometers. And district roads cover a large distance of 467763 kilometers.

Among all the states in India, Uttar Pradesh has the largest road network. There are 42 national highways that pass through the state of Uttar Pradesh. Additionally, 83 state highways complement 42 national highways in connecting the densely populated state of Uttar Pradesh. Following are the list of national highways that pass through the state:

• National Highway 2 (NH-2): 752 out of 1465 KM passing through Uttar Pradesh
• NH-3: 26 out of 1161 KM pass through Uttar Pradesh
• NH-7: 128 out of 2369 KM
• NH-11: 51 out of 582 KM
• NH-19: 120 out of 240 KM
• NH-24: 431 out of 438 KM
• NH-24B: 185 out of 185 KM
• NH-25: 270 out of 352 KM
• NH-26: 128 out of 396 KM
• NH-27: 43 out of 93 KM
• NH-28: 311 out of 570 KM
• NH-28C: 140 out of 140 KM
• NH-29: 306 out of 306 KM
• NH-56: 285 out of 285 KM
• NH-58: 165 out of 538 KM
• NH-73: 60 out of 188 KM
• NH-74: 147 out of 300 KM
• NH-75: 110 out of 1175 KM
• NH-76: 587 out of 1127 KM
• NH-86: 180 out of 559 KM
• NH-91: 405 out of 405 KM
• NH-91A: 126 out of 126 KM
• NH-92: 75 out of 171 KM
• NH-93: 220 out of 220 KM
• NH-96: 160 out of 160 KM
• NH-97: 45 out of 45 KM
• NH-119: 125 out of 260 KM
• NH-231: 169 out of 169 KM
• NH-232: 305 out of 305 KM
• NH-232A: 68 out of 68 KM
• NH-233: 292 out of 292 KM
• NH-235: 66 out of 66 KM
• NH-330A: 227 out of 227 KM
• NH-730: 519 out of 519 KM
• NH-730A: 110 out of 110 KM
• NH-931: 114 out of 114 KM
• NH-931A: 60 out of 60 KM
• NH-NE2: 90 out of 134 KM

Uttar Pradesh Core Road Network Development Program (UPCRNDP)

Additionally, state government under Chief Minister Akhilesh Yadav has focused on developing and improving state highways. Uttar Pradesh Core Road Network Development Program (UPCRNDP) has been established under which new state highways will be built and old ones will be improved. In early 2015, World Bank assured a grant of Rupees 3500 Crores for the project. For the project, a total of 24095 KM of road network has been identified including state highways and national highways passing through the state. The money raised will be used for widening of 1000 KM of state highways, building 419 KM of new roads, raising the formation level, pavement rehabilitation/strengthening. The work is expected to be completed within the timeline of year 2017.

Agra-Lucknow 6 lane expressway received allocation of Rupees 3280 crore in UP Government’s 2014 budget. This expressway is expected to be completed by end of 2016. Meanwhile, work on Lucknow-Ballia Purvanchal expressway is expected to begin in near future. The Uttar Pradesh’s Government budget 2016-17 has provision of Rupees 28600 crore for roads and highways projects.

What does it mean for real estate sector?

• Impact on affordable housing

Road network is an essential part in the development of any city, state, or country. Therefore, focus of Uttar Pradesh Government to improve road network in the state is commendable. This will not only lead to improved connectivity but also enhanced economic activity. New jobs will be created and people will be able to commute from faraway places to cities for their employment.

Building and improving the road network will go a long way in eliminating the housing shortage in the state. Affordable housing can come up in areas where land is cheap and because of greater connectivity people will actually inhabit those places. Therefore, Uttar Pradesh Government’s UPCRNDP initiative will boost demand for affordable housing.

Steps taken in Budget 2016 and UPCRNDP Project will complement each other and housing shortage can be overcome in coming years.

• Impact on commercial real estate development

Improved connectivity will boost development of commercial real estate across the state. Office spaces, malls, as well as institutional real estate such as hospitals, schools, and universities can be developed on back of enhanced road network. Private investment in this space will pick up and this will further strengthen the eco-system of the state of Uttar Pradesh.

Data Source: World Bank

Budget 2016 – What’s in it for real estate sector and what State of Uttar Pradesh stands to gain from it?

Highlights of budget 2016

Budget 2016, as described by real estate industry experts is a game changer for the overall housing sector in the country. The budget proposes following incentives for the growth of the realty sector in the country:

1. For houses up to the area of 30 square meters in 4 major metro cities and the houses up to the area of 60 square meters, the budget 2016 provides 100% deduction for profits to a company. These houses have to be approved during the period June 2016 to March 2019 and completed within the period of 3 years. For example, if a real estate developer starts a housing project in Meerut (Uttar Pradesh) for developing houses up to 60 square meters and the project is approved during the period June 2016 to MARCH 2019, then, in that case, the developer will get 100% deductions for profits provided the developer completes the project within 3 years of approval.
2. Affordable housing has got major boost and service tax has been exempted on the development of affordable house up to the area of 60 square meters. This applies to any central or state scheme.
3. For first time home buyers, a deduction for additional interest of Rupees 50000 per year for mortgage loans up to Rupees 3500000. The cost of house shall not cross Rupees 5000000. This will provide boost to housing demand particularly in tier-2 and tier-3 cities.
4. HRA deduction of rent paid under section 80GG for the salaried class has been increased from current Rupees 24000 to Rupees 60000 per month.
5. Exemption from excise duty on Ready mix concrete that is manufactured at the construction site for the use in construction.
6. Real estate investment trusts (REITs) can now be a reality. Finance minister has removed the Dividend Distribution Tax (DDT), thereby, clearing the way for successful listing of REITs across India.

 

Housing shortage across India

The budget has cleared many obstacles in the way of affordable housing across India. There is overall shortage of about 20 million houses across urban India. And 187.80 Lacs or 18.78 millions of that shortage belong to economic weaker section or low income groups. Of these 18.78 million shortages of houses, about 3 million of shortage lies in Uttar Pradesh, followed by Maharashtra at 1.9 million, west Bengal 1.3 million, Tamil Nadu 1.2 million, Bihar 1.2 million, Rajasthan 1.1 million, Karnataka 1 million, and rest across other states of the country.

Prime opportunity for the state of Uttar Pradesh

Uttar Pradesh is the largest state in India and there is now prime opportunity for the state to close this housing shortage. The state government has taken many measures in order to eliminate the housing shortage for Economic weaker section and low income groups. Mr. Akhilesh Yadav led state government recently announced Samajwadi Awas Yojna under which efforts are being made to construct 3 Lacs houses by the year 2016. Under this scheme, houses will cost in the range of Rupees 15 Lacs to 30 Lacs. The prices of houses will not exceed 3000 rupees/square feet in cities in national capital region such as Noida, Ghaziabad, and Greater Noida. And in metros, the prices will be capped at 2800 rupees / square feet and in other cities across the state, the prices will 2500 rupees/square feet.

• How it is being implemented by Uttar Pradesh Government?

The Uttar Pradesh state government has announced variety of measures to implement the scheme.

• Development of infrastructure
• Land use conversion to be free of cost
• Concessions to be given on stamp duty charges
• Single window clearance system

• How budget 2016 can be of great help to implement housing schemes in Uttar Pradesh?

To eliminate the 3 million housing shortage across the state, houses need to be built at a rapid pace. And this needs to be taken up by both public sector as well as private sector. While public sector in Uttar Pradesh has announced Samajwadi Awas Yojna in the past, the private sector now needs to step in and construct affordable housing. The budget 2016 provides many incentives for private sector to come in and develop these houses. Tax exemption on profits, exemption from excise duty on ready mix concrete, exemption of service tax are some of the measures that now incentivizes the private sector companies to develop affordable housing in the state of Uttar Pradesh. At the same time, state government can provide physical as well as social infrastructure to make these houses viable and livable.

We hope, with this budget, the state governments across the country will focus on development of affordable housing and Uttar Pradesh can take the lead and be a model state in eliminating the housing shortage across the country.