The world tuned into their TV sets and scoured the early morning newspapers when the voting for the Brexit began. Naturally, as was expected economists, politico circles, industry insiders, businessmen/women of every sphere had an opinion as they did on the impact of the exit. That said, every common man, whether in the European Union or outside of it, echoed similar sentiments of anticipation and trepidation, not because there were any ‘direct’ influences on his/her life but because there was a widespread concern that, in one way or another, lives would be affected and the brunt of the decision would be shared. In other words, an indirect bearing that was going to be experienced among commoners, working class, the governing authorities and to the entire commercial community as well.

Closer home in India, the Brexit was looked upon closely and while most of the populace felt that India was well positioned to take the blow and that the effects, if any, were going to be minimal, there was a contrarian belief that opined the consequences (which may not seem outwardly obvious) were definitely going to be felt by one and all for sure.

The curve ball that is

Whichever side of the debate you may be on, there can be no two ways to the reality that the world is a much smaller place and that economies, businesses, people and trade relations function interdependently today on each other more than they ever did before. This line of logic can be used to explain the impact that natural calamities, turbulence in trade/ political/ defence relations or economic shakedowns taking place in far flung parts of the globe have on people living on either sides of the continent.

Coming back to the Brexit, in India the stock markets, as expected, were in a turmoil and there were a lot of up’s and downs and swinging rallies to be seen the week of the voting. Once the dust settled, experts and market gurus of every major industry in India, including the country’s financial governing authorities voiced their individual assessments on the impact of Brexit in economic totality.

The real estate industry, understandably, had an inkling of what the future of the industry would be and it was well understood that there will be some unpredictability, especially in the immediate future.

How the Chennai real estate market will react

It is thought that there will be some near future impact and the residential and commercial real estate industry at large will be subject to some instability. While it is difficult to pinpoint in actual tangible terms the exact effect, there is a general consensus that prices will face some heat.
That said, it is also being thought that because the pound to rupee consideration will also be a crucial factor, the pricing impact will be phased out and will instead usher in renewed interest in real estate in Chennai.

Moreover, a critical point that tilts the scales in favour of Chennai’s realty is the fact that most of the commercial offices (property) in India that belong or having a base of operations in the United Kingdom is a mere 5-7 per cent or so. Which is why the consequence of the Brexit will not be as damaging as previously thought.

On the other hand Chennai’s residential realty industry is not dependent on the Brexit effects; hence not much is going to be affected by the ongoing situation. Investors are partly cautious partly buoyant as there is hope that once the full implications of the exit are clear, foreign investments may flow, once again, into India and those metros especially fast growing cities like Chennai and Bengaluru would gain substantially from it.