Chennai's Real Estate Market Sentiments: A Current Analysis

The real estate market in Chennai has been facing a turbulent period for the last few years. The economic slowdown, demonetization, and the implementation of the Goods and Services Tax (GST) have affected the market sentiments in the city. However, according to the recent reports, there has been an improvement in the market sentiments.

The primary reason for the improvement in the real estate market is the reduction in the Goods and Services Tax (GST) rates for under-construction properties. The GST rate for affordable housing has been reduced from 8% to 1%, and for other properties, it has been reduced from 12% to 5%. This reduction in GST rates has made homes more affordable for buyers, and hence the demand for housing has increased.

Apart from the reduction in GST rates, the other reason for the improvement in the market sentiments is the stable political situation in the state. The peaceful transition of power after the passing of the former Chief Minister, J Jayalalitha, and the stable government under the current Chief Minister, Edappadi K. Palaniswami, has instilled confidence in the investors and buyers.

Another factor that has positively impacted the real estate market is the reduction in interest rates by the Reserve Bank of India (RBI). The RBI has reduced the repo rate to 5.15%, which has made borrowing cheaper for buyers. The reduction in interest rates has resulted in a lower cost of borrowing, which has led to an increase in demand for home loans.

The increased demand for housing has given a boost to the construction industry as well. Due to the increase in demand, the cost of construction materials has reduced, which has resulted in lower prices for buyers. This has attracted buyers to purchase properties, which further increases the demand for construction materials, and thus the circle continues.

The government's support for the real estate industry has also contributed to the improvement in market sentiments. The state government has announced several initiatives such as the Tamil Nadu Real Estate Regulatory Authority (TNRERA) to regulate the real estate sector, single-window clearance for projects, and incentives for affordable housing projects. These initiatives have instilled confidence in the investors and buyers, as they are assured that the government is taking measures to ensure transparency and accountability in the sector.

In conclusion, the real estate market sentiments in Chennai have improved due to the reduction in GST rates, stable political situation, reduction in interest rates, increased demand for housing, and government support. These factors have resulted in increased sales and new project launches, which indicates that the real estate market is on the path to recovery. However, experts advise that investors and buyers should exercise caution, keep an eye on the market trends, and choose the right property and location for investment.