The onset of the Covid pandemic had disrupted many sectors including Real Estate. Being specific to Tamil Nadu’s real estate market, it saw a major decline in the sales of properties in the first half of 2020. However, as the situation of the virus decently improved by the end of 2020, the optimism of the investors doubled. The state of Tamil Nadu is witnessing a steep recovery from the slump. The end of 2020 saw a strong up move in property sales. Encashing the benefit of low demand, falling prices, lower home loan interest rates, and so on, people have shown remarkable intent in buying real estate in Tamil Nadu. This effect is continuing in the first quarter of 2021 too.
Chennai Zone takes the Lead in Property Registrations
Being the major hub of IT, Automobile, and Hardware industries, the capital of Tamil Nadu was at the heart of the robust real estate drivers in the first quarter of 2021. The Chennai Zone of Tamil Nadu recorded a substantial proportion of almost 41% of the overall property registrations in Tamil Nadu. This includes places like Chennai City, Tiruvallur, Kancheepuram, Chengalpet among other districts.
Tamil Nadu recorded revenue of ₹1070 Crores from property registrations in April. This number also depicts the realizations from the property bookings at the end of 2020. From the above number, almost ₹455 Crores is accounted for by the property registrations in the Chennai Zone. Following the trend in Chennai Zone, the Coimbatore Zone also marked 175 Crore of revenue received by the State. This trend of revenue earnings of over ₹1000 Crores per month is continuing since February.
The Tamil Nadu elections also added their boost to the real estate property registrations as it gained momentum after the winding up of the election drive in the first week of April. Moreover, the month of April also recorded more than average document registrations up to 2.3 Lakhs. The Chennai Zone showed an increased contribution matching the pre-covid numbers.
These improved numbers depict the positive sentiments of the investors in the Real Estate Market of Chennai and Tamil Nadu. To further understand the reasons behind the positive boost in the numbers, let’s understand the detailed analysis of the above scenario.
Reasons for significant Rise in Chennai’s Real Estate property registrations
Affordable Migrant Workers back to action
The Developers in the Tamil Nadu region sought to bring the migrant labourers back on construction sites that had gone back to their hometowns amidst the nationwide lockdowns. The Developers’ associations arranged private buses to bring the workers back and start the construction works to meet deadlines. This ensured that the stalled projects were back to operating in full vigour and at the same time, the cost of migrant labourers was maintained. Thus, making it possible for developers to offer discounts on sales.
Lower Home Loan Interest
The RBI Governor had announced cuts in the benchmark repo rate last year which reduced the lending rates by the banks. Thus, investors were able to buy real estate properties at a less overall cost of interest payments.
Additional increase in tax deduction on home loan interest
The 2021 budget session had allowed for additional tax exemption on home loan interest up to 1.5 Lakhs for the purchase of homes under the affordable housing scheme. The FM announced this scheme as a booster to steer up the demand in the real estate sector.
Discount offered by builders
Builders and developers in Chennai are offering a discount to sell off their unsold inventories before the pandemic. Thus, investors are getting cheaper prices for real estate deals. This also sums up the growing number of property registrations in Chennai and Tamil Nadu as a whole.
Deputy CM’s promise to reduce Stamp Duty rates
The deputy CM of Tamil Nadu has promised to reduce the Stamp Duty and Registration rates at the request of the Confederation of Real Estate Developers Association of India (Credai) Chennai. This decision can be seen in the upcoming state policies as the election results are out.
New Projects launches of 2020
The new projects of 2020 were hit by the pandemic. However, after the steep decrease in Covid cases in late 2020, the new launches saw much attention from the investors. There was a 92% bounce back of new launches in Chennai, Coimbatore, and so on. Thus, returning to pre covid numbers will be possible in 2021 with the vaccination drive slowing the Covid rally.
The Big Vaccination boost
The Covid vaccination drive began on a pan India level in March 2021. Similarly, Tamil Nadu also ramped up the vaccination in the month of March with almost 6.5% of the population being administered the first dose of vaccine in the first half of March. This optimistic boost also gave the investors relief and thus, more certainty into their daily lives. With this, more people were ready to take their dive into the real estate investments amidst the favourable scenario in the sector.
With major changes happening in Chennai’s real estate sector, the current period will be the best to invest in the real estate properties in Chennai. The number of property registration is exceptional in April. And with the Tamil Nadu Government’s probable fulfilment of the promise to cut Stamp Duty rates, the growth in the real estate sector is evident. People can take advantage and invest in these times to gain the maximum benefit.
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Chennai Real Estate FAQ's:
Yes, Chennai is one of the top metro cities in India. Price appreciation is a major factor for buying real estate in Chennai. In addition, Chennai being the hub of IT, automobile and hardware industry, more growth options are available in Chennai’s real estate. Thus, with the above remarkable property registrations number in Chennai, it is the best time to invest in Chennai.
Some of the best places to buy property in Chennai are Ambattur, Pallavaram, Tiruvallur, Korattur, Oragadam, Avadi, Porur, etc.
Some of the best places to invest in property in Chennai are Ambattur, Pallavaram, Tiruvallur, Korattur, Oragadam, Avadi, Porur, etc.
The documents to be checked before buying a property in Tamil Nadu include Encumbrance Certificate (EC), Sale Deeds, Legal Scrutiny report, No-Objection Certificate, Land Clearance Certificate, etc.
The fastest developing areas in Chennai are Manapakkam, Mangadu, Old Mahabalipuram Road, Mogappair, Pallavaram and so on.