There’s a lot of development, but not much of it’s in Chennai itself. So the residential market’s stagnating. That’s why buyers are turning to second-hand flats as an investment option.
Sanjay Chugh, VP – Transaction Mgmt Services, Jones Lang Lasalle Meghraj says, “The buyer feels that if one is to go for a second-hand apartment on a resale basis there are two things: capital investment is much cheaper, also the registration cost which is slightly higher and the refurbishment cost, if they are getting at the location they are looking at it works out quite cheap.â€Â
Second-hand flats are 30 to 50 percent less expensive than new constructions. Besides, possession is quick and banks readily finance resale flats as old as 35 years. So, investors see it as an easier investment option.
Residential construction in the city is at a virtual standstill because exorbitant land prices and high margins are keeping developers away. Although there is huge demand for resale flats, experts say supply is not even 10 percent of demand.
In the past year second-hand flat prices have risen 50 percent. But they are still in demand because of poor residential development. Source: moneycontrol
