ET had a write-up that home prices are likely to fall by a few percentage points in Delhi and Mumbai. There is definitely high inventory in those areas and builders have to cut home prices to clear inventory, but is that likely to happen to real estate in Chennai as well?
In the last two months or so we have noticed a slow down in land registrations (not price decline, but less sales). RBI’s interest rate hike and some unsold inventory could eventually bring down price a little, but it won’t be as bad as in Delhi or Mumbai. Here’s why…
Of the 4 states in South India, Tamil Nadu is the only stable place that is favorable for industries. Telangana issue in Andhra is keeping new businesses away. Kerala has labor issues and efficiency is quite low. Bangalore in Karnataka is great for IT, but it’s just that. That leaves Chennai as a favorable urban destination for new industries and businesses, which in-turn should translate to a decent home sales and rental market.
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