Ultimate Guide on Chennai Real Estate Investment

Chennai has been recognized as a global market for real estate investments. It is a city that buzzes with aspirations and opportunities. The cultural mélange and modernized lifestyle has attracted the youth of the country to settle in Chennai. Chennai has been ranked as one of the most desirable South Indian cities as it is home to IT corridors, economic growth and educational opportunities. , Commercial investments are some of the main factors contributing towards this.City Infrastructure developments, Higher employment opportunities

Chennai stands out with its modern-colonial balance, which is made visible through their unique architectural designs, food, tourist locations, etc. Chennai is also emerging to be a smart city as it has a firm hold on the IT, automobile, and residential sector. 

Buying a property in Chennai is definitely one of the best decisions as it is a great investment option. Some of the main factors contributing toward this is the rapid infrastructure developments, newer commercial investments and higher employment opportunities. The main contributor of Chennai’ realty market is its IT and automobile sector as it opens up several job opportunities. There has also been a visible growth in the residential real estate sector owing to the rising population. The main focus of the builders in Chennai is to provide homebuyers with luxurious and comfortable housing units proximate to the workplaces. 

Chennai Demographics

Population

Chennai, the capital city of Tamilnadu is also known as the gateway of South India and is located in the coastal region along the Bay of Bengal. It is also the economic activity center of the Southern India. The population of Chennai according to the UN World Population Prospects in 2021 is 11.2 Million (1.12 Crore). Chennai has also been recorded as the third largest city to host expatriate population after cities like Mumbai and Delhi. 

Religious Ratio

Chennai has been ranked as the fifth largest urban agglomeration city of India and the 30th in the world. According to the census of 2011, 80.7% belongs to the Hindu population while 9.4% are Muslims, 7.7% are Christian and 1.1% are Jains. 

Literacy Rate

The literacy rate of Chennai stood at an average of 90.20% in the last census. The census of 2011 also recorded the literacy rate among men in Chennai to be 93.70% while 86.60% was recorded in women. The majority of the population talks in Tamil and is followed by languages such as Telugu and English. 

Land rates in Chennai

Geography

Chennai is a low-lying area and the surface of Chennai is interestingly known to be flat as a pancake. The surface raises slightly as the distance from the sea shore increases. However the average elevation of the city is not more than 22′ above mean seal-level. Chennai has always been credited for its pleasant scenery. It is called as the town which is open to the sky and full of mangoes, coconuts, guavas and oranges gardens. 

Government rates

The land rates determined by the government are called as the guideline value of the land. The land rates are determined according to the infrastructure growth in a particular locality. The rates are revised periodically in order to keep the market rates intact. The price of the property also varies from one area to another. The registration of a property above the recorded guideline value will result in new guideline value. The value ranges from Rs 18,890 per sq. ft. in Thiyagaraya Nagar to 2,500 – 7,038 per sq. ft. in Kelambakkam. 

Chennai Real Estate Market Forecast 2021

The realty market in Chennai in the 2019 saw a 6% yearly rise in sales for the residential property. The latter half of the year 2019 also saw an 8% raise in the yearly sales of the residential property. The major trends of 2019 were ready to move-in homes and nominal housing. This led to the builders wanting to offer something different in the next year. Some of the major trends of the 2020 Chennai realty market includes co-working, co-living spaces, development in the northern Chennai and development in the south. However, the realty market did not see any drastic shift in the year 2020 due to the pandemic. 

The year 2021 is expected to curate the harm done by the pandemic. However the development may be gradual. The main focus of homebuyers in the year 2021 is energy-efficient and eco-friendly homes. Homebuyers have also shown interest in societies that consider health and wellness. The introduction of integrated gated township which is a combination of a properly organized real estate set up and a holistic mix of housing opportunities along with amenities such as green open spaces, and commercial centers’ connectivity is expected to boost the sales rate in 2021 as well. 

RERA in Tamil Nadu & Rules and Regulations

The Tamilnadu Real Estate Regulatory authority was set up on 22.06.2017 with the objective of ensuring transparency and efficiency in the real estate transaction. The TRERA is bestowed with the power to hear any disputes that arise between parties in both Tamilnadu as well as in Andaman and Nicobar Islands. They also carry out the registration activities for new projects, agents, builders, etc.

Tamil Nadu RERA Registration Process

The RERA Act mandates the registration of any building which exceeds 500 sq. ft. or any apartment having more than eight floors. The properties in Tamilnadu as well as in Andaman and Nicobar Islands can carry out the registration process by visiting the online portal of the Tamilnadu RERA authority. 

The Section 9 of the Act provides for the registration of real estate brokers and also prohibits any real estate agents and brokers from carrying out deals on plots or buildings, without registering themselves and their projects under the broker license Act and issuance. An agent is also required to fill in Form G for registering himself and Form A and Form B to register his project. Section 3 of the Act also provides the list of all necessary documents to be submitted by promoters or developers while registering their project. 

Fee

While registering the project, you are also required to pay an amount decided by the government as registration fee. The contact details of RERA is provided in the online portal. 

How to check Land Ownership in Tamil Nadu

Land ownership is one of the most important factors affecting property transactions. Government has taken efforts to digitize the land records. The digital land records of the Tamilnadu government are called as Patta Chitta. Patta is also called as the record of rights and is issued by the government. Chitta on the other hand is a document dealing with the land revenue records, land area, property owner name, type of land, etc. 

You are required to submit documents such as an electricity bill or tax receipts and a copy of the sales deed for the purpose of proving ownership in the property. You may apply for a Patta Chitta through the official portal of the Tamilnadu government. You may also verify the existing Patta online using the government portal. 

While transferring the property, you are also required to amend the Patta Chitta. You can make an application for changing the ownership name on the Patta through offline modes as there is no online means for the same. You may do so by visiting the Taluk or Village Administration Office in the locality of the property.

Tamil Nadu Stamp Duty & Registration Charges 2021

The process of real estate investments may invite several additional charges. Stamp duty tax and the registration fee are charges imposed by the government and are forms of government’s revenue. The stamp duty varies from state to state as the amount is fixed by the state government. However there are also certain reductions that are granted on stamp duty charges if the purchase is carried out in the name of the female member of the family.  

Tamilnadu charges high rates as stamp duty and it is important that you keep a considerable amount as a reserve while buying a property in Chennai. The stamp duty charges imposed on property transactions is 7% of the market value of the property. Additionally the registration charges on property transactions is 4% of the market value. The stamp duty also varies depending on the type of transfer. In other words, the stamp duty imposed on property transactions such as partition, lease, mortgage, etc. varies from one another. 

Investment Opportunities in Chennai

Chennai has been recognized as a great investment spot as it is an epicenter for developments mainly in the IT and automobile sector. These developments have aided in increasing the demand for the real estate property as well. The fact that Chennai has great connectivity and rapid infrastructural developments have further attracted several investment opportunities to Chennai. Some of the common areas in Chennai that are known for real estate investment includes, OMR, ECR, Urapakkam, Guduvancherry, etc.

Some of the common areas of commercial real estate that you can invest in to maximize your returns includes the investments made in the office spaces, retails, rental spaces, industries, factories, etc. Investing in such properties is also a good form of investment for the middle class as they can maximize their profits. Investments made in commercial real estate earns the buyers higher returns on their sale while residential properties let out on rent, can earn you a stable and regular income. Chennai has also emerged to be a global market and this further makes Chennai a great spot for investment. 

Best Places to Invest in Chennai in 2021

The real estate market is a dynamic set up and needs to be modified as new trends emerge in the market. Chennai has been recognized as a global market and attracts several investment opportunities. One of the main reasons for the increased number of investments is because it offers citizens a well-knit safe environment with better living conditions, connectivity to the workplace and better infrastructure. It has also turned to be an educational hub and also offers employment opportunities.  

Some of the best locations to invest in Chennai includes Thoraipakkam, Kelambakkam, East Coast Road, Sholinganallur, Chrompet, Ambattur, Guduvanchery, etc. One of the main reasons for this is due to the development of several industrial units and IT parks opening up. With the increase in employment opportunities, people migrate from different parts of India and this in turn has led to the increase in demand for residential properties as well. Some also look for homes in these areas to save on the transportation costs.

Commercial Property Investment in Chennai

The government has taken several initiatives to promote industrial and commercial advancements in the country. The government has also improved the transparency in the real estate transactions by introducing the Real Estate Regulatory Authority (RERA). The introduction of the Act has led to the increase in Foreign Direct Investments (FDI) in India for the commercial real estate sector. 

Some of the common factors contributing towards the development of commercial real estate in India include development made in the IT sectors-ITES, retail, consulting, e-commerce, and industries. 

Best options for commercial real estate investments

Some of the common commercial real estate investment options available in Chennai include investments made in office spaces, economy spaces, malls/showrooms, retail, warehouses, lands or Farm Lands, etc. Flexi spaces, Hub and space model and hybrid model, has also been recognized as the most looked for properties in 2021 due the pandemic conditions. 

Residential Property Investment in Chennai

Tamilnadu and its capital city is known for its rich cultural, economical, and educational developments. It has also been recognized as one of the safest cities in India to reside in. Chennai has been recorded as the third-largest expatriate population in the country after cities like Mumbai and Delhi. The demand for residential properties in Chennai rooted from the fact that it is a fast growing city and its infrastructure developments, widespread IT parks, educational institutions, automobile industry, healthcare facilities, etc. have been successful in attracting buyers to invest in residential property.

The growth factors affecting the residential real estate set up includes its mixed economic base, constant development in infrastructure and connectivity, etc. The various developments in Chennai has also resulted in the expansion of zones in Chennai. The increased number of commercial investments in the main city has also led to the increase in demands for residential properties in the adjacent localities owing to the facts that the main city properties are costlier than those in the outskirts. The residential real estate market in Chennai is also end-user driven. 

Best location for residential investments

Some of the best location in Chennai to invest in residential real estate includes Anna Nagar, Tiruvallur, Pallavaram, Porur, Sholingur, OMR, Oragadam, Ambattur, Gundavancherry, Pallikarani, Korattur, etc. 

Industrial Property investment in Chennai

The Industrial real estate sector can be defined as properties facilitating any industrial activities such as production, manufacturing, assembly, warehousing, research storage, and distribution. Investing in industrial real estate can prove to be beneficial as several retail giants and boutique retails are moving to online mediums to sell their products. Industrial investments can be made in the form of investments in warehouses, factories, Warehouse & Distribution Buildings, Industrial Land, Flex buildings, Factory Units, Refrigeration & Cold Storage, etc. 

Best place to invest for Industrial properties

Chennai has been one of the most prominent industrial hubs. It hosts several industries such as automobiles, chemicals, petrochemicals, food processing, and electronic industries in abundance. It is also a prominent player in the IT sector and homes several IT parks and companies. The development in Chennai’s manufacturing and automobile industries has positively impacted demand for the industrial properties. Some of the best locations for investing in industrial properties includes Guduvanchery, Ambattur, Avadi, Tiruvallar, Great Southern Trunk (GST Road), OMR, Poonamallee, Sriperumbudur-Oragadam cluster and Periyapalayam cluster. 

Top reasons to invest in Chennai

Chennai is a prominent market for the real estate sector. It has also been recognized as the global market for residential and commercial properties. Chennai saw the maximum investments in its luxurious property segment. It also attracts large investments in the form of FDI. In other words, Chennai is one of the most sought out locations by NRIs for investing in real estate. Some of the reasons why you should invest in Chennai include:

1. Scale of development
2. Connectivity and infrastructure
3. Affordability, lifestyle and entertainment facilities offered in Chennai 
4. Smart investments
5. Development and expansion beyond the main city

Pros & Cons of investing in Chennai

Investing process can be carried out efficiently only after evaluating the pros and cons attached to it. Real estate is no exception. Investing in Chennai has several advantages and limitations. Some of the major advantages of investing in Chennai includes:

1. It is a hot location for commercial development and thus the value of the property will increase drastically in the future. 
2. Chennai, like Bangalore and Hyderabad, attracts several commercial giants to invest in them. This in turn increases the number of working professionals and this indirectly leads to the increasing demand for residential properties as well.
3. Better and modern lifestyle. Chennai also offers recreational facilities and also offers stability. 
4. Infrastructure and connectivity are also an added advantage to Chennai’s residential and commercial market.

Despite all these advantages, some of the limitations of investing in Chennai includes its saturated golden old suburbs, its widespread area and the lack of choice. 

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