Resale flats are in big demand in Chennai
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€
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
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Resale flats have always been in demand, but for a very short period between 2003-2004 where we did see a slum in the demand for used flats. To our clients at Connection Point we compare a second hand flat to that of a second hand car. You do get it cheaper that a new car, but it costs you more to maintain. But unlike cars, one of the main resons resale flats are in demand is becuse of location, as new flats are always difficult to get in a location that you really desire, but older constructions are everywhere.
Yasser Rahman
Connection Point