Land buying becomes the latest fad in Chennai

True to the saying that ‘the best investment on earth is earth’, Chennaiites are now more inclined towards investing in land notwithstanding the strained economic condition and stagnancy the real estate sector has been witnessing for the last few years, says K Ramanathan.

With buying homes becoming increasingly difficult for lower and middle class segments, people who could invest as low as Rs one lakh to 10 lakh are increasingly looking for land on the outskirts of Chennai for investment purposes and what more, land promoters are jumping into the fray to tap the God sent opportunity offering land in newer locations around the southern metropolis at affordable prices.

However, real estate experts warn that the overwhelming rush towards buying land would encourage fly-by-night promoters to cheat the gullible land seekers.

“The city has been dotted with posters of various sizes informing people about the availability of land in various places like Redhills, Chengelpet, Oragadam, Avadi, Periapalayam, Sriperumbudur, Madurandagam, Melmaruvattur etc from prices ranging between Rs one lakh to Rs 10 lakh. Some even offer DTCP approved plots of 600 to 1200 sq ft for as low as Rs 6 lakh. People have a good chance to invest in properties at low price as land has less chance of depreciation unlike homes,” says Sathish Kumar, Managing Director of Anandam Foundation.

Though investment in land properties would be ideal considering the present slowdown, care should be exercised in choosing the property under one’s budget. 

What made people to go after land in Chennai? S Stalinraja, Senior Manager, Sales and Marketing of Omshakthy Homes Private Limited, says, ‘The present market condition guarantees more value appreciation for land properties compared to flats. For the last few years, some of the areas of Chennai have witnessed depreciation in capital value for flats whereas prices of land have been increasing steadily.’

S Stalinraja

Agrees Mayank, a property investor from South Chennai. ‘I bought a DTCP approved plot measuring 2400 sq ft in Madurandagam for Rs 6 lakh in 2012. It was sold to me at Rs 250 per sq ft. Presently, developers are offering land at Rs 450 per sq ft in the same area, almost 100 per cent appreciation one can say in one year,’ he says.

In the recent years the state government has been focusing on the infrastructure of Chennai and the surrounding suburbs. Adding to market growth, south Chennai suburbs are experiencing heightened activity as multi crore companies are changing the skyline.

Chennai City has grown and expanded exponentially, embracing what was once known as the outskirts, Guduvanchery, Singaperumal Koil and Oragadam, now becoming the hot hubs of Chennai with multi national companies investing in crores. With industries booming and the demand for real estate escalating, areas of south Chennai will continue to grow, no doubt the investment on land property will double in few years from now, says Sathish.

Of the promising investment hotspots for land around Chennai, Chengalpet on GST Road remains on top, offering varied investment options for middle class and upper middle class people. The reasons for those choosing Chengalpet for property investment are many with some of them being, close proximity to manufacturing & IT hubs and Mahindra World City, the business township of TIDCO.

Being the southern gateway to Chennai city, Chengalpet has been one of the fastest developing municipalities in recent times and situated just 30 km from the city center. Apparently termed as ‘New Chennai’, it is the metro’s first integrated business city and India’s first operational Special Economic Zone.

Air, road and rail networks have been expanded to provide handhold service to the public in South Chennai. New master plans have been proposed by Chennai Metropolitan Development Authority (CMDA) in terms of rail route that includes laying of the second lane between Chengalpet and Arakonam, which is about 60 km from Chennai. According to some front-line developers, Chengalpet will become a well-equipped metropolitan city in the next four years.

Chengalpet also has both quality education and medical facility under its belt. The district is equally endowed with top autonomous and affiliated educational institutions in the state.

“Apart from Chengalpet, which provides short-term gain for investors, other places which offer quick appreciation of land value are Oragadam, Sriperumbudur, Singaperumal Koil, Poonamalle, Madurandagam and up to Thiruvallur. One should also look for transport, educational, medical, employment facilities before choosing a land for either investment or residential purposes,” feels Badal Yagnik, Managing Director – Chennai and Coimbatore, Jones Lang LaSalle India, a leading real estate research firm.

Making a pitch on southern and western outskirts of Chennai to get fast and consistent appreciation of land value, Bala however, cautions against buying land in northern and north eastern localities such as Redhills, Periyapalayam, etc, which he feels, have less chances of appreciation in short term. ‘Even for long term also, compared to southern parts, these areas will have less appreciable values. So, one must be very careful from the road-side advertisers offering plots in these areas at affordable prices with hosts of freebies such as free patta, registration, EC, gold coins, scooty etc,” says Badal.

On the percentage of appreciation, southern Chennai areas can appreciate between 30 per cent to more than 100 per cent depending upon the location with in 3-5 years, people who are investing in other areas can expect appreciation between 30-50 per cent in the span of 5-10 years.

The price also varies depending upon the appreciable values, which depend on the infrastructure facilities available and future prospects in the area. For example, a person having a budget of Rs one lakh can look for a land at far off places near Thiruvallur or Arakkonam and can wait for ten years to get a decent appreciation, where as those who look for a fast appreciation of their money can buy a land measuring 1200 sq ft for Rs 10 lakh at places like Oragadam or Sriperumbudur and book profit within three to five years, says Stalinraja.

Legal side

Though there has been a landslide rush towards buying land, legal experts believe that buying land through reputed promoters would save them from being cheated.

“Though lands bought through prominent and reputed developers would be little costlier, these properties would have less chance of having title deed-related problems. One should not blindly believe builders or developers as properties to be purchased should be thoroughly checked for legal problems through a competent authority,” says S Ramaswamy, senior advocate, Madras High Court.

While purchasing land, one should see for appropriate approvals from local panchayat, DTCP or CMDA authorities for using the piece of land for residential or commercial purpose. Encumbrance certificate would give details about the details of liabilities, if any, on the property to be purchased. Transition of legal heir/s should be thoroughly screened for any anomalies in subsequent property sales. One should also demand for Patta, chitta, adigal, copies of necessary approvals and legal opinion.

Lack of awareness drive people to buy land from unscrupulous developers without checking the documents. ‘Most of them do not even ask for a copy of documents such as parent documents, patta, EC, approvals, etc. They simply pay the advance money and give the rest at the time of registration. If any problems arise after few years, at the time of building home in the land, landowners seldom find those who sold the property to them. So it is better to check the documents before registering a land, say legal experts.

“A genuine developer would handover all these copies to the prospective buyer after a token advance which is refundable in case of any legal problem, found later by the client’s lawyer,” says the advocate.

Places to ponder

Areas for short term gain (3-5 years)	Areas for long term (5-10 years)
Oragadam, Sriperumbudur, Singaperumal Koil, Poonamalle, Madurandagam, Kanchipuram, Thiruporur, Sholinganallur, Chengalpet, Padappai, Mahabalipuram, Guduvanchery, Chungavarchathram, Melmaruvathur, Walajabad, Karapakkam	Dindivanam,  Marakkanam, Periapalayam, Redhills, Paruthipattu, Tiruvottiyur, Thiruvallur, Kalpakkam, Uthiramerur, Putlur, Minjur, Athipattu, Thirumazhisai,