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Supply-demand gap in housing – chennai

November 30, 2010 Leave a comment
  
Listings posted with Magicbricks.com between July and September 2010 reveal that the top ten localities which posted maximum listings were T Nagar,Velacheri, Porur, Adyar, Ambathur, ECR, Kolathur, OMR Road, Besant Nagar and Virugambakkam. Requirements posted on MagicBricks.com reveal that 2 BHK multi-storey apartments are most in demand followed by 3 BHK and 1 BHK apartments. Overall,the supply was highest in the 2 BHK and 3 BHK categories with multi-storey apartments posting maximum listings comprising 52 per cent of the total supply.
  
However, on comparing the demand and supply data,a mismatch was observed in the number of available options as compared to the demand especially in the 1 BHK and 2 BHK segments where the demand outstrips the supply. The 1 BHK category, which caters to the affordable housing segment,is where the mismatch lies. The demand is robust but options are limited.
  
On the other hand,in the 3 BHK segment, there is a significant supply of multi-storey apartments with little demand to absorb the existing housing stock.When an investor looks at regular returns out of a residential real estate investment,this is a critical parameter to consider. The smaller units have more demand and are easier to lease out. The demand for bigger units is limited.
 
Localities such as Adyar,T Nagar and OMR posted 2 BHK and 3 BHK  apartments  within a higher price range ( 100 lakh and above), while localities such as Ambattur and Kolathur posted more affordable options ( 18-30 lakh). Residential projects comprised 23 per cent of the total supply and maximum listings were posted in the 3 BHK category.
 
However,requirements posted with Magicbricks.com indicated that the demand was highest in the 2 BHK category which is not being met adequately by the existing housing stock. In the 3 BHK category on the other hand,there is an over supply. The market demand has moved in the direction of apartments.The traditional fixation of standalone property is fast giving place to modern apartments with latest amenities and lifestyles.When one buys a property,the constraints of price are a big consideration.However,for the occupant,the rental options are as wide and scattered as he or she is willing to look for.
 
In the residential segment,there exists a significant demand for more premium options of 4 and 5 BHK categories which are adequately met by the existing housing stock as indicated by listings posted with MagicBricks.com. The premium segment is well catered to and even the rental market in this segment is mature and well-established.In the rental housing category catering to young and mobile professionals,furnished property fetches better values.Most lessees prefer to move into a new city into furnished accommodation. In cities such as Gurgaon, Delhi and Bangalore,where the workforce is very young,the escalation in rental values from furnished property can be as high as 35-50 per cent. 

 

Times of India epaper, 27 November 2010

 

Housing for Slum dwellers

CHENNAI: Giving green signal to the state government’s move to create 3,000 more tenements for slum-dwellers and tsunami-affected people, the Madras high court has dismissed a PIL against the re-settlement project at Kannagi Nagar in Okkiam Thoraipakkam off Old Mahabalipuram Road (Rajiv Gandhi Salai).

A division bench comprising Justice Elipe Dharma Rao and Justice KK Sasidharan, rejecting the PIL of Susetha, however, directed the authorities to provide clean and safe environment for the locality, where already more than 12,500 families living on the banks of Cooum, Adyar rivers and Buckingham canal had been relocated.

Underlining the government’s constitutional duty to safeguard the citizen’s right to life, the judges said: “Right to life under Article 21 does not mean an animal life, but to living life with human dignity.”

Advocate R Vaigai, counsel for the petitioner, sought to restrain the authorities from reclaiming or filling land in the Okkiam Thoraipakkam village off the OMR, and wanted the court to ban construction of any more tenements for slum-dwellers. Infrastructure facilities such as drinking water and drainage were not enough for even existing families, and the area was a marshland as per the 1911 settlement register, she said.

Advocate-general PS Raman, however, said the state had to shift about 50,000 families from various slums in the city, and that the area was not a marsh. Distinguishing the area from the Pallikaranai marshland, Raman said the PIL had been filed due to mistaken belief and political ill-will.

When the PIL was admitted a couple of years ago, the earlier bench had appointed an expert committee to go into the issue and furnish a report. The committee, too, felt it was an ecologically sensitive area where no further construction activities should be permitted. Instead, the entire region could be handed over to the forest department, it recommended.

The judges, rejecting the recommendations and censuring the committee for drifting beyond the terms of reference, said Okkiam-Thoraipakkam did not fall under the prohibited zone and that it was neither a marshland nor backwater area, as claimed by the petitioner.

Directing the authorities to provide hygienic and clear living environment in the region, the judges said civic neglect of basic needs would turn the residents towards anti-social activities. “The state is burdened to provide not only mere living rooms but also living conditions to the residents,” the judges observed, adding that the state and its organs should secure the rights and interests of citizens and ensure their life with dignity.

Times of India, 29 July 2010