The Real Estate sector is an evergreen investment option, since the asset exponentially grows in value as time progresses. This sheer option makes it an interesting venture. In most of the families, the primary long term goal would probably be to invest in a house and finally acquire the status of being the proprietor.
The key factor into boosting the sector would be to develop the existing infrastructure in the city. The construction of better buildings at cheaper rates would make the industry boom. However, this cannot be done right inside the city. The developers have taken it into the suburban areas to develop them. This can be seen in areas such as Iyyapanthangal, Kattupakkam, Vandalur, Guduvanchery and even Siruseri. These areas have seen massive improvements in the last couple of years and are still going to develop a lot more. The intrusion of many global brands into the city have brought in a good aura to the traditional city.
However, these areas have poor connectivity when we compare it to the urban areas. This needs to change if the city is going to expand truly into its suburban counterparts. The city has seen massive progress in terms of connectivity. The metro is operating from Airport to CMBT and the underground lines and the second lines are expected to be operational soon. The MRTS connects the OMR areas and the small buses connect the link roads. They make sure to cover the small areas which the bigger MTC buses don’t cover. MTC has taken steps to ensure each and every area is connected through their buses.
This cannot be said for the suburban areas, where the connectivity options are limited to just one or two modes. The expansion of Metro into the suburban areas would take at least a decade with the current pace. This seems unlikely as the overhead involved doesn’t guarantee much returns for the government. This needs to be dealt with if these areas are to be massively developed. The connectivity through the Outer Ring Road is a boon connecting the areas of Vandalur to Poonamalle and practically reducing the travel time between these areas significantly. The roads have wide lanes and this ensures the smooth movement of traffic. The connectivity of OMR to ECR makes sure the IT parks aren’t ignored. There is still a lot of work to be done, but this is a good foundation to build on.
With the recent demonetization act, the interest rates are expected to go down. If these rates prevail, then it would be easier for young adults to finally buy their own houses. The kind of interests the banks currently offer blows off any young adult who wants to buy their own home. The government has extended the deadline to pay taxes with the old currency. This helps to improve the economy, which directly translates to cheaper interest rates. Real Estate loans have long term binding to the banks. In some cases, the consumers are required to pay off the loans over a span of a decade or two. This kind of long term commitment can be helped with lower interest rates from the banks.
The economy needs to stabilize soon enough, if the sector is to boom. If the economy goes into an overdrive, the pressure lands on the common man more than anyone else. The interest rates would shoot up and this would affect anyone who wants to buy new property and the existing loan paying crowd.
One key point to notice is that real estate developers need to produce affordable housing. This can have a positive effect on the people, since most of them are working class individuals. People get discouraged when properties are slapped with huge prices and the sheer amount stops people from taking up this venture. The idea of affordable housing is both viable and practical in the suburban areas. The developers have been looking into this idea and have been working on it for a while now. Affordable housing inside the city and outside the city have a very different meaning altogether. The pricing and the ROI (Return of Investment) are vastly different.
To summarize, the aforementioned points need to be considered if the real estate sector is to be boosted. The suburban areas are the key and the government needs to improve the infrastructure and the connectivity in these localities.