Chennai property prices regain ground

Tuesday, December 20, 2005 (Chennai)

Sanjay Pinto

For owners of expensive beach front property in Chennai, the tsunami in December 2004 brought a nightmare of a different kind.

Post tsunami, the prices of beach properties in the area nose dived. A 2,400 square feet plot, priced at Rs 75 lakh, crashed to Rs 40 lakh.

To add to the problem was that there were very few takers.

Bounce back

However, the downward spiral was short lived as the real estate business has now bounced back.

"Tsunami created a flutter for a short time. People were in a mood to withdraw from the bookings already made. But that didn't last," said P V Sanmugam, MD, Kgeyes Builders.

Even in areas like Kottivakkam, the rate for a 2,400 square feet plot is now Rs 25 lakh, up from the Rs 10 lakh it had dropped to after the tsunami.

"The value of property with approved layouts built closer to the sea has doubled in the past six to seven months," says C Subba Reddy, MD, Ceebros Properties.

Norms flouted

The government's Coastal Regulatory Zone prohibits settlements upto 500 metres from the sea but many houses here violate this rule, which affected the market post tsunami.

And even now many new homes are still being built, totally violating environmental norms.

"People want to buy only if there is an approval. The funding agencies too would give loans only for approved places. But most of the houses built are unapproved," says Suhail Sarushi, VP, Chennai Real Estate Agents Association.

These beach houses are usually the second or third home for many who live here and clearly, nature's wrath is not deterrent enough for them.