Looking towards 2025, the real estate sector in Chennai is expected to experience consistent growth, with property prices projected to increase by 5-7% across the city.
This gradual rise can be attributed to significant infrastructure projects underway, including the Chennai Metro Rail Phase II and various road expansion initiatives, which are enhancing connectivity and accessibility throughout the area.
In this blog, we will look at how these trends combined with other factors are changing the market value of land in Chennai, keeping you ahead of the curve in your property investment journey.
Importance of Understanding Factors Affecting the Market Value of Land in Chennai
When making property investments in Chennai, it is essential to understand the market value of land. Below is an overview of the reasons why understanding is important.
- Informed Decision-Making: When you understand the market value of land, you can make informed decisions that will enable you to invest in profitable properties by really understanding land prices.
- Maximise Long-Term Return on Investment: By considering an estimation of the land price and other contributing factors to land value, as an investor you may choose property that is able to increase in value and garner higher returns.
- Negotiating Leverage: If a full understanding and analysis of land value and the market value of land is at the forefront of an investment strategy and plan, you will have a stronger negotiating position in getting favourable deals.
- Maximise Rental Income: Knowing the different factors contributing to land value will allow you to assess rental yield potential to better understand the profitability of an area.
8 Key Factors Influencing Market Value of Land in Chennai
- Location and Accessibility: Land prices are strongly influenced by their proximity to major amenities such as schools, hospitals, shopping areas, and employment centers. Urban locations tend to value properties at higher land prices because of their demand for residential or commercial space. Having reasonable access through good roads, highways, and public transportation will also appeal to developers and investors looking for ease and connectivity, enhancing the market value of land.
- Zoning and Land Use Restrictions: Zoning regulations stipulate how land must be used and affect its market value. All investors need to consider any restrictions that the current or future zoning may have for land use or profitability. It is one of the major factors which determine the market value of land.
- Topography and Land Features: Topography and land features also affect the market value of Land. Level land is more desirable when constructing improvements, land farming, or land development because it requires less intervention and work to prepare for use. Conversely, hilly or rocky land will likely increase the cost of development and reduce use potential. Natural features (such as lakes and forests, or mineral deposits) can increase the market value of land if recreational or resource extraction opportunities exist.
- Economic and Market Trends: Economic trends such as a booming economy, a growing population, or an increasing demand for real estate typically increase land prices. On the other hand, an economic downturn or a recession can lower land prices thus reducing the market value of land. Factors related to the local real estate market, such as demand for residential homes or commercial space, can also shift the market value of the land.
- Infrastructure and Utilities: Property with easy access to existing infrastructure (roads, power lines, and water systems) can be developed more easily and for less money increasing the market value of land. For land that lacks utilities, there is likely to be a higher upfront investment to bring some or any infrastructure to the site.
Such investment can lower the overall return on investment, forcing investors to justify the investment. An investor will often want to invest in sites that have access to utilities in order to help control ongoing investment and costs.
- Market Comparables: Sale prices of comparable properties in the area can provide insights into market activity and can help establish a fair value.
In the case of larger tracts of land, a real estate professional would look at sales of similar-sized, similar zones, and similar location properties to determine the current land value. Competitors serve as a standard to arrive at an “in-line” price to be competitive and accurately priced.
7.Land Valuation Tamilnadu: Legal Factors to Check: A clear title, with no legal encumbrances (e.g., no liens, unpaid property taxes, mortgages, or litigation), means that the property is transferable and can be developed without complications and delays.
Unresolved legal claims against the property may mean that buyers need to negotiate purchase agreements to resolve legal action encumbrances, and as a result, buyers may become discouraged and lose interest.
Additionally, easements, rights of way, and restrictions will limit the use for which the land may be suitable, reducing the market value of land.
- Possible Rental Yield: The potential for rental income can create strong influences on the open market value, particularly for buyers focused on long-term income potential. High-demand real estate in locations with demonstrated rental market absorption further adds to the property’s rental yield potential and, in turn, can have positive influences on market value of land.
In addition, land zoned for commercial, industrial, or residential uses could allow buyers the opportunity to generate income through leasing or development, which may also further create upward influence on market value of land.
Questions You Should Ask Before Investing in Large Land Plots
Getting into land investment can be fulfilling, but you must understand the main components that come into play regarding land price before you proceed with a purchase. Before taking the leap, here are some important questions to ask to make a sound investment.
1. What is the current market value of land in the area?
It is important to know the market value of land in the area. This will help you ascertain if the land is sold at a fair price based on where the land is located, the available amenities, and how the area may or may not experience growth in the future.
2. How is the market value of land determined today?
The market value of land is based on local demand, infrastructure developments, and regional economic conditions. Staying abreast of and being familiar with these changes means you’ll be aware of the recent land value.
3. How does the market value of land compare to previous years?
Comprehending how the market value of land has shifted over the years can provide context for trends, determining whether it is a good time to buy or sell.
4. How can infrastructure projects affect the market value of land?
Infrastructure projects, such as metro projects or additional highways, can substantially increase the land’s market value. There may be future infrastructure projects in the area to support that land value may increase in the future and/or have increased the market value of the land due to easier accessibility to the land.
5. How do zoning laws affect land market value?
Zoning laws can affect the market value of land significantly, especially when the zoning is changed to allow commercial use or mixed-use. For example, if an area has become a desired area for commercial investors and businesses the potential market value increase could be significant.
6. What is the potential rental income yield based on the market value of the land?
The market value of land is accepted as providing rental yield potential because of how zoning policy affects market value, and demand for it in relation to market value. For example, properties in areas where demand is high and near significant infrastructure projects will lead to a much higher rental yield based upon the ability to invest in those properties as exceptional investment potential.
7. What is the land value of the property to be interested in?
The land value gives you a marker to assess the potential value of the property at its market value in its location and market dynamics. In a nutshell, it will help you make an informed decision regarding your investment.
Invest in G Square Plots: Your Way to a Dream Home
Investing in G Square plots in Chennai is an extraordinary opportunity to enjoy the benefits of curated locations, developed infrastructure, and wonderful community amenities.
We offer customers ready-to-build villa plots that include established internal roads, street lighting, and 24/7 CCTV surveillance, backed by years of successful projects in Chennai.
The G Square Build Assist program provides a seamless construction journey from building plan approval to your Gruhapravesam.
Join the vibrant real estate market with the opportunity to participate and invest in homes like this with G Square. If you are interested, contact us today to find available plots and an enjoyable process to build your new home.
