Chennai is in the grip of a real estate frenzy. Last week I accompanied a friend who is looking for an apartment, to try to get an idea what all the fuss is about.

We first went to a project in Alwarpet which is just a couple of months from completion: 5 buildings set close together, with an open area in the middle, which will eventually contain a swimming pool. All but two of the flats have already been sold. We walked through one of them and saw from every window the nearby windows and balconies of the neighbours. The person who had taken us to see the project said that it had opened for advanced sale two years ago, at Rs. 2,500 per square foot. The remaining flats have been selling for Rs. 10,000 a square foot -- what an increase, in only two years! The flats that we saw were decent, but small and not exceptional.

Next we saw two empty plots in Poes Garden, one of the city's hot real estate spots, where the price was Rs. 12,000 per square foot. Again, all but one of the flats had already been sold. Then on to Rutland Gate, where a project is going for Rs. 11,000 per square foot. At least there, there is a private lift for every flat, as well as a swimming pool, and there are only 15 flats on 21 grounds -- less density than what we had seen so far. All but three of the flats have been sold.

Finally we went to the Boat Club area, which is considered the ultimate in snob value. It was once full of enormous houses, and it's still quiet and leafy. But I was surprised at how many apartment buildings had come up here, too. We saw a flat that was slightly under 4,000 square feet, which was selling for Rs. 17,000 a square foot! That's about 7 crores for an apartment (= approx. US$1.5 million, if my calculation is correct). Once again, it was spacious, which most Indian flats are not; but otherwise not obviously special.

I went home with my head swimming, and blessed our green garden, and our own house, with its own peculiarities, faults and virtues. It felt like a small island in a choppy sea; but the city is changing so rapidly all around us: I wonder how long we will be able to withstand it.


Joel said...

That kind of shift can be maddening. Time matters. I remember showing up just too late in the Silly Con Valley -- rents and mortgages were well beyond my means. The experience remained with me -- when we came down to Orange County the prices seemed ridiculously low so I said to my wife "WE MUST BUY!" And we did.

I am watching India with fascination as it becomes the United States of the 21st century. The question is what is the United States becoming? Not Europe.

Nancy said...

Do you think India will become the US of the 21st? If so, it will be a very different US -- the new money and all the hype float on a huge sea of poverty and illiteracy. India really is changing, and fast; one can only hope that it brings its poor along with it.

Anonymous said...

As I walk into a gleaming SW park bldg, the gap between the security guard (Rs2500/- pm) who signs me in and the SW engineer (~Rs250,000pm) who receives me is striking.
The gap is becoming too wide and unless this is addressed first, there could be a serious social unrest that india will have to overcome before it stabilizes.

Personally, I would rather have an india with a slower, far reaching growth than this hyper growth in specific vertical sectors.
- kumar

Lakshmi said...

On a less philosophical note, I could fall on your shoulder for mental support ! I am trying to buy an apartment in Chennai (Madras, to old timers such as yours truely) purely for investment purposes, and it has been driving me nuts. The price of even a rat hole is unbelievable. Thank God we live in "quarters" provided by the husband's work place, and we still have an ancestral (palatial, by current apartment standards) house in the heart of T.Nagar to fall back on !

Nancy said...

Hmmm, doesn't sound as if you need any support... I do wonder if buying for investment in Chennai is the right thing at the moment -- it's hard to imagine prices soaring higher than they have. Though my husband keeps telling me "They don't make new land. What there is is all there is..."