Ganesh Vasudevan reports on how property prices in the city remain stable after natural disasters
Chennai is no stranger to natural disasters. Right from the tsunami in 2004 to this year’s cyclone Vardah, the city has endured many large-scale calamities.
One may think that natural calamities have a lasting impact on the real estate sector, but the truth is that in the long run, it has little or no bearing.
In the aftermath of the tsunami, many had expected prices along the coastal corridors of the city to take a hit, but it never happened. Micro markets along Chennai’s coastline such as the East Coast Road, Besant Nagar, and MRC Nagar had been on the front-line, and experts anticipated that buyers would stay away from these markets entirely. But in the last decade they have witnessed tremendous growth and are amongst the most expensive residential localities in the city today. For instance MRC Nagar, which occupies a good chunk of Chennai’s coastline, has seen an astronomical price appreciation of 60 per cent year-on-year in the past decade. An apartment in MRC Nagar which was selling at Rs. 3,000 to 4,000 per sq.ft. a decade ago, is priced at Rs. 18000 to 20,000 a sq.ft. today.
Even an apartment in Besant Nagar ranges between Rs. 14,0000 and Rs. 17,000 a sq.ft.
Another example of property prices remaining stable after a natural disaster is the one-year period between the floods of December 2015 until today. There were many localities around the city which bore the brunt of the floods, and experts predicted a fall in property prices in affected localities. In reality, the floods hardly made a dent on pricing. Some of the worst affected localities such as West Mambalam, Kotturpuram, and Ramapuram have either shown stability or marginal appreciation in property prices.
Hence, going by data from the past, the damage caused by cyclone Vardah to the sector will be negligible.
There are, however, a few precautions that can be taken which will help one to minimise losses incurred during such disasters. It is always best to avoid choosing low lying areas when you are narrowing down localities for your home. There are a number of home insurance schemes which offer a wide range of coverage for both builders and buyers. In the light of recent calamities, both man-made and natural, it is best to be safe than sorry.
The writer is CEO, Indiaproperty.com
As seen on: The Hindu
Image: By Ajayy99 – Own work, CC BY-SA 3.0, https://en.wikipedia.org/w/index.php?curid=45387731