Chennai’s residential market, which has been impacted by the overall slowdown in 2014, is recovering with a spurt in the volume of enquiries and clinching of deals for apartments in the price range of Rs 40-60 lakh. Unlike earlier, property developers are seeing deals closing as the first time homebuyers want to make use of the current slowdown to strike bargain deals. Moreover, rise in input costs has convinced end users that the market has plateaued.
“Apartments in the price range of Rs 30-60 lakh are fast moving in the southern belt as 70 per cent of supply is focused in this region,” said Sanjay Chugh, National Head–Mandated Sales & Business Head, Chennai, JLL Residential Pvt Ltd. While new launches have slowed down, built units are finding buyers who are keen to commit themselves in the current market scenario.
In a related development, smaller projects across micro markets are driving demand as end users are prime movers in a price sensitive market. With flexible lending norms by select banks for smaller entrepreneurs made feasible, this has strengthened the confidence of budding entrepreneurs to enter the housing market.
Industry estimates vary over the quantum of residential market absorption from 20,000–22,000 units in 2014, a dip in overall volume by 20-30 per cent over the previous year. However, there are a number of feel good factors on the anvil which will make Chennai market open up in a big way in the coming months, say realtors. The annual event by Credai members titled ‘Fairpro’ has been scheduled in February 2015, where a number of developers are expected to launch their new projects.
As regards high-end projects, there is a perceptible shift in the trend with the number of enquiries having gone up for units priced below Rs 20,000 per sq ft in city areas. However, clinching of deals is taking more time than anticipated in the current market scenario. An estimated eight high-end projects had been launched in the city areas last year in the price range of Rs 15,000–25,000 per sq ft.
With the IT sector driving substantial housing demand in Chennai, recent instances of lay-off by some of the IT majors are a cause for concern. “But there is no dearth of demand even today if there is a right product with the right price and at the right location,” said A Sivaramakrishnan, executive director, Residential, CBRE.
Source Times of India V Nagarajan magic bricks bureau