CHENNAI:Though hot on the weather front, it looks like Chennai is not as hot on the realty market.
The city has been the worst performer in real estate among all the six metros during the last quarter of 2014, according to a report released by Liases Foras, a top real estate rating firm in the country.
The report — which puts Bengaluru second on the list of worst performers — shows that Chennai has registered a fall of nearly 17 per cent in sales during the quarter. To make matters worse, prices have also risen marginally.
The slowdown in the sector is not new. The city’s realty market has been witnessing an extended slowdown for over a year now, but hopes of a revival, kindled by the brief spurt in sales figures just after the 2014 Lok Sabha election, have not translated into a sustained revival. The figures for the three-month period beginning September 2014 and ending December 2014 are telling.
According to Liases Fores’ report, in Chennai, the sales in terms of sq feet have fallen from 29.31 mn in Q3 2013 to 2412 mn during the same period in 2014. Unsold stock has also risen, albeit not as drastically, from 59.43 mn to 60.95 mn. In fact, Hyderabad is the only city among six top investor friendly cities of the country which has registered growth in the property sale during this period.
Chennai, they say, has performed worse than the rest for two reasons — the lack of investment leading to a lack of new supply and the downturn in demand post the Moulivakkam collapse.
“Investment has wound down for a variety of reasons. But post-Moulivakkam, there has been a palpable reduction in sentiment for Multi Storey Apartments (MSB),” said M Arun Kumar, MD of Casa Grande, a prime developer.
“There has been a feeling of apprehension in real estate circles that it could be a major cause of negative sentiment. But I think that the overall economic scenario coupled with increased prices in land rates is a more important factor,” said R Kumar, MD of Navin Housing and Properties.