Land in Chennai: Spiraling values
According to an article in The Hindu on the 14nth September, the number of registrations of property transactions on the outskirts of Chennai far outnumber those anywhere else, including the city. According to the article, the suburbs have witnessed around 100 per cent growth in property transactions over the last two years, with the Sub-Registrar’s office in Sriperumbudur registering the maximum number of property deals in the State! Registrations during 2005-06 and 2006-07 show substantial growth in transactions in Tiruporur, Tiruvallur, Walajabad, and Tambaram. Velachery and Neelankarai have not, apparently, seen as dramatic an increase in the numbers, but maintain a steady rate of transactions.
The city, however, has outdone the suburbs in terms of property value, with the three zones in Chennai registering about 3.7 lakh documents netting about Rs.1,384 crore between April 2006 and March 2007. Chennai alone contributes to slightly over a half of the State’s revenue collection , according to senior officials in the Registration Department, with over 80% being registration of land deals. Chennai recently witnessed two high-value property transactions. A property near Anna Arivalayam on Anna Salai was registered for Rs. 202 crore at Rs.10,500 per square feet in July. The guideline value of this property, when it was registered, was only Rs.5,556 per sq.ft. It was subsequently revised to Rs.8,000 per sq.ft. A residential property in the Boat Club area was registered for Rs.175 crore in March at Rs.16, 657 per sq.ft. The Government-prescribed guideline value of the Boat Club area before August was Rs.2,885 per.sq.ft and after revision it is now Rs.8,400 per sq.ft.
Senior officials in the Registration Department say that going by the trend, the number of property transactions have not reduced because of the rise in guideline value. But they add that the current number of registrations, which at present are being collated, may be lower since March due to the slow-down in real estate transactions. What does seem clear though is that as demand continues to increase, both from industry and for residences, the value of land will only appreciate. The demand, particularly in the outskirts, seems insatiable as Chennai’s urban sprawl spreads, spurred on by developments like the IT Corridor, the MRTS and the new ring road. The proposed metro will also make it easy and quick to get into the city. Hopefully, this will eventually take the pressure off the city centre as nodes for business, commerce and residences will continue to develop, so that we have a decentralized form of development for which Chennai is now taken as an example. In the meantime, anyone with a plan of owning land on which to build the house of their dreams will have to move further away to afford it.