August 28, 2007

Realty firms urge Dubai NRIs to invest in Chennai

The recent emergence of Chennai as an Indian manufacturing hub for IT and automobile multinationals has fuelled a 50 per cent increase in the city's average property prices, say organisers of a property exhibition targeting Dubai NRIs.

Real estate companies participating in the HDFC India Homes Fair in Dubai say Chennai's economy has driven a major improvement in the quality and value of the city's property developments.

With Dubai NRIs originating from Chennai second only in numbers to Keralites, companies are targeting Dubai as a strong source of demand for their new projects, especially apartment complexes.

"Chennai is one of the fastest growing cities in India and the property market has done very well recently," said Vikram Goel, Dubai-based branch manager of Housing Development Finance Corporation (HDFC).

"Today the average cost of a property is about 4.5 million rupees, which is a 50 per cent jump since last October."

Goel said the price hike should not deter Dubai NRIs from investing in the property market. He claimed that prices are still competitive compared to other cities, but admitted that infrastructure improvements are struggling to keep pace with the rate of real estate construction.

"People are very comfortable investing in their own state and even today, the concept of real estate is not investment, but actual usage for their own need.

First-time buyers

"Most of the people at the exhibition are first-time buyers who will make purchases for their parents or for back-up when they return to India."

Industry estimates value the total expected investment into Indian real estate at $20billion over the next three years. However in some cities such as Delhi and Mumbai, property prices have cooled off in the last six months.

A.M. Haree, head of marketing at Chennai-based VGN Enterprises, said Chennai's real estate market is experiencing a slight slowdown due to a hike in interest rates, but expects the market to rebound before the end of the year and maintain more stable growth levels in the future.

"Dubai is a good market for us. We have many clients here and overall it represents around two per cent of our total sales," he said.

Goel said the last HDFC India Homes Fair to focus on Chennai attracted a footfall of 2,500, which resulted in around 200 sales during the event at an average of 3 million rupees per sale. Most sales were confirmed at a later date, he added.

This year's three-day exhibition started yesterday in the Hotel Renaissance in Deira and was inaugurated by Consul General of India, Venu Rajamony.