Upward and onward – Chennai Real Estate

Several realty reports are suggesting a comeback for real estate across the country and a huge demand is being seen in the affordable segment.

The year 2018 has been a year of revival of sorts for the property market in Chennai. Recent reports suggest that new consumers now rule the previously investor-driven market.

The last two years saw a slew of reforms and regulatory measures being implemented and there was a certain degree of a confusion before the market could touch the new normal. According to Anuj Puri, Chairman, Anarock Property Consultant, “With the now discernible impact of RERA, DeMo and GST, housing sales are seeing an upward trajectory in 2018 q-o-q. New launches have also gone up this year with affordable housing witnessing significant growth. NRIs see India’s rebooted real estate market environment conducive enough to justify property investments, especially on the back of the depreciating rupee.” That is the national trend at large.

Earlier this year, many real estate experts observed a 50 percent jump in overall new housing launches in the second quarter of 2018 over the preceding quarter, with the maximum supply being in the affordable segment (less than 40 lakh). Interestingly, the affordable housing supply increased by 100 percent in Q2 2018 over Q1 2018, and this supply has led the overall growth.

The city connect

To be more specific, Chennai’s new supply doubled to 4,200 units in Q2 2018 compared to only 2,100 units in Q1 2018, which is an increase of 100 percent. Over 64 percent new supply was added in the affordable segment.

A report by Knight Frank also said that buying interest was more inclined towards projects that were closer to completion and more so in the affordable segment, between Rs 25 lakh and Rs 40 lakh. And with 6,520 units launched in H1 2018, it was the highest in the last three years. The prices also declined by 4 percent YoY as developers doled out discounts to lighten inventory load.

“The Chennai office market that has been reeling under an acute supply crunch over the past three years has seen some respite in H1 2018 with the supply scenario easing somewhat with 10 percent growth in new completions. The paucity of quality office space also led to a strong rental growth. The residential real estate market, on the other hand, has begun on a positive note as H1 2018 shows the promise of a potential recovery in residential market volumes. H1 2018 saw the highest number of units launched in a single period during the past three years and the persistent drop in sales was largely muted as well, compared to the preceding period,” says Kanchana Krishnan, Director – Chennai, Knight Frank.

Arjun Narayanan, Times Property, The Times of India, Chennai