Metro Rail to boost property prices in Chennai

Much like the Delhi Metro did in the Capital, the prices of properties lying within Chennai Metro corridors are bound to receive a boost, once Phase I of the project is operational.

One of India’s largest cities with more than eight million people and a population density of 6,482 persons per sq km (as per Census 2011), Chennai clearly qualifies for a mass public transport system that could ease its considerable congestion woes. Although Chennai already has a Mass Rapid Transport System (MRTS), its daily capacity is limited to well under 100,000 people. Consequently, the roads bear the brunt of the daily traffic, leading to a harrowing time for most commuters.

This has been the natural trigger for conceiving the Chennai Metro Rail Project. Much like the Delhi Metro, Chennai Metro Rail is also poised to provide local citizens a modern, convenient, efficient and economical mode of public transport that is properly integrated with other public and private means of transport within the city. With the Commissioner of Metro Rail Safety having given a clearance in early April for operating Chennai Metro trains, it is merely a question of time before residents are freed from some of their daily commuting hassles. 

There is another collateral benefit the Chennai Metro Rail will offer the citizens, particularly those living close to the Metro Rail Stations, much like the Delhi Metro has done – a boost in property prices. This is especially true for properties situated within a kilometre or two of the Metro, with those a few kilometres away also registering some spurt in prices. It should be remembered that people are always willing to pay a premium for residential premises situated close to the Metro, since there are immense savings in terms of reduced commute time and costs.

Of course, there is a downside for residences located right next to the Metro Rail tracks and station. Property prices in such locations could be somewhat depressed due to the periodic sounds that tend to disturb the neighbourhood’s serenity, particularly during the early morning or late night hours. But this effect is not as pronounced as the rise in prices of properties. Fortunately, the effect of dipping prices is always temporary and once people within the locality get attuned to the sounds from the Metro, property prices begin rising once again.

The price rise effect is attested by many locales. For example, during the past 12 months, Alandur has witnessed the highest price rise of 5 per cent. It needs to be noted that this is one of the locations where the Metro’s trial runs are underway. According to JLL India too, land prices along Metro corridors will soar by 15–20 per cent after the Chennai Metro Rail begins operations.

Phase I of the Chennai Metro Rail is coming up in two corridors: Washermanpet to Airport and Chennai Central Railway Station to St Thomas Mount, both currently in various stages of completion. Phase II will be built through three corridors: Madhavaram to Lighthouse, Koyambedu to Injambakkam and Madhavaram to Perumbakkam.

Once built, the Chennai Metro will run across the entire city. This will finally help developers and investors off-load their unsold inventories. As of today, Chennai is considered to be one of the most affordable markets amongst India’s top six cities, with some 30 per cent of new launches in the second half of 2014 being below Rs 25 lakh. With Phase I of the Chennai Metro Rail likely to be commissioned sometime this year, property sellers seeking higher rates will not have too long to dispose-off their investments.

Given the reliable track record of the Delhi Metro Rail in boosting property prices within months of becoming operational, it is only a question of time before the Chennai Metro triggers a similar spurt in property prices across the city.