Chennai Insite Report Apr-Jun 2015

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Chennai Insite Report_Apr-Jun 2015

City Highlights

Unlike the first quarter of the year, which recorded a price growth of five per cent for residential properties in Chennai; the city endorsed negligible movement in capital values in Apr-Jun 2015. Real estate experts attribute this to discounts offered by many developers to push sales up in the said quarter than any price correction.

  • Significant price movements in Chennai_Apr-Jun 2015While the country’s overall real estate market continues to be in a grim state, builders in Chennai are pining hopes on the metro rail. The first phase of the long-delayed Chennai metro became operational in June, covering 10 km from Koyambedu to Alandur and infusing life in the city’s realty scenario.
  • Investor sentiments dampened with reports on snowballing unsold inventory in the city. According to one such report by research firm Liases Foras, at the current absorption rate, Chennai will take 36 months to clear the existing stock of residential units. No wonder, it witnessed but a marginal growth in Apr-Jun 2015 versus Jan-Mar 2015.
  • While properties in Central Chennai recorded the highest growth in Jan-Mar 2015, prices of residential apartments here fell by seven per cent in Apr-Jun 2015. Realty experts attribute this not to the price corrections, but to the discounts that developers in the region are offering in order to invigorate the market.
  • Transforming the very look of the realty sector in the metropolis and offering luxury and high-end luxury inventory, West Chennai recorded capital price appreciation to the tune of three per cent in Apr-Jun 2015 as against the previous quarter.
  • Owing to the growing demand for residential and commercial space from IT, the city cracked Public Equity deals worth $303 million lately. Such investments are expected to work as growth tonics for Chennai’s realty. 

Key Influencers in Chennai_Apr-Jun 2015

Capital Analysis

  • Top performers in Chennai_Capital Values_Apr-Jun 2015For the last few quarters, the penchant for high-end living from the local populous in Chennai is on a rise. Catering to the demand are Kovur, Porur, Madanandapuram and Koyambedu in West Chennai. These localities registered capital appreciation to the tune of 10-24 per cent in Apr-Jun 2015 as against the previous quarter.
  • Localities in West Chennai recorded a massive spike, primarily due to the metro line from Koyambedu to Alandur becoming operational in June end. Capital values in both Koyambedu and Madanandapuram surged up by 11 per cent each in a quarter.
  • Capital values in Anna Nagar, Korattur and Mogappair appreciated due to the presence Ambattur industrial belt, driving housing demand from the working population. Property prices here rose by 15 per cent, 11 per cent and 10 per cent respectively in a quarter.
  • One of the prime residential areas in North Chennai, Anna Nagar, never ceases to attract home buyers due to well-developed infrastructure and easy connectivity with other parts of the city. Apart from this, Anna Nagar is slated to have three metro stations in the near future – two in the locality itself and one in Anna Nagar East.
  • Kelambakkam, a growing suburb in South Chennai, has seen an increase in buyer interest due to rapidly developing social infrastructure on the Old Mahabalipuram Road (OMR). Proximity to IT companies in Siruseri, Chettinad Health City and Kovalam beach helped it register a quarterly growth of 10 per cent. 

Rental Analysis

  • Top performers in Chennai_Rental Values_Apr-Jun 2015A Y-o-Y analysis reveals that rental values in Chennai increased by an average of seven per cent in Apr-Jun 2015, as compared to Apr-Jun 2014. Localities in South Chennai grabbed seven positions among the top ten grossers in the city’s rental market.
  • Kelambakkam, an IT hub itself, has emerged as one of the most sought after locality for temporary abodes and registered a spike of 22 per cent in rentals in the last one year.
  • In line with the previous quarter, South Chennai emerged as the most popular zone for rental returns. It witnessed the highest rise in rental rates by eight per cent, followed by Central Chennai, which recorded seven per cent spike.
  • Good connectivity, robust supply of rental inventory and well-developed social infrastructure led to rise in rental values in Thoraipakkam by 21 per cent in the last one year.
  • The Grand Trunk (GST) Road witnessed a surge of 20 per cent in rental prices with localities such as Perungalathur, Maraimalai Nagar, Urapakkam and Singaperumal Koil on the stretch becoming favourable choices for rented accommodation.
  • Madipakkam, a popular suburb in South Chennai, recorded a yearly rental spike of 20 per cent, chiefly due to increasing demand from the migrant population working in the neighbouring IT hub - OMR.

 

Supply Analysis

Unlike other cities, Chennai recorded increased number of new residential launches in Apr-Jun 2015 in comparison to the previous quarter. This is despite the fact that at the current pace of housing sales, the unsold stock requires about 36 months to be absorbed completely.

Availability of Different Property Types

  • Supply by property type in Chennai_Apr-Jun 2015Supply of various property types in Chennai remained largely unchanged in Apr-Jun 2015, as compared to Jan-Mar 2015.
  • The growing migration to the city propelled demand for residential apartments, which offer both convenience and security. Due to this, supply of residential apartments crawled and stood at 68 per cent this quarter.
  • Out of the total inventory of apartments in Chennai, close to two-third were located in the South, owing to growing IT industry driving housing demand.
  • Not having adapted to the apartment culture, the city’s native population has a preference for independent houses/villas. The category captured one-fourth of the total market share. South Chennai had the maximum share of independent houses/villas for sale, followed by North Chennai.
  • Supply of builder floors remained limited to six per cent this quarter. More than half of these were located in South Chennai.

Availability of Property by Budget

  • Supply by budget in Chennai_Apr-Jun 2015Similar to the previous quarter, Chennai recorded almost equal supply of inventory falling in mid-income housing (Rs 25-40 lakh) and high-income housing (Rs 40-60 lakh). The categories captured more than one-fourth share, each, of the total market supply.
  • Capturing almost one-third of the market, mid-income housing remained dominant in the South, where maximum demand was noted from IT professionals.
  • Out of the total properties in West Chennai, maximum were available in the mid-income segment (Rs 25-40 lakh), followed by the high-income segment (Rs 40-60 lakh).
  • Unlike other cities such as Delhi, Bangalore and Mumbai, Chennai did not witness an increase in affordable housing segment. Supply of properties in the said budget remained stagnant at 10 per cent.
  • Out of the total properties in North Chennai, about 15 per cent were priced under Rs 25 lakh. All other zones had less than 10 per cent supply in this budget category.
  • Gaining popularity, the supply of luxury-housing segment (Rs 60 lakh–1 crore) stood at 20 per cent in the quarter ending June 2015. Out of the total inventory in Central Chennai, about a quarter was priced in this budget range.
  • Supply of the ultra-luxury segment (Rs 1-5 crore) stood at 16 per cent in Apr-Jun 2015, two per cent lower than the previous quarter.
  • Supply by configuration in Chennai_Apr-Jun 2015Undoubtedly, most of the properties in Central Chennai fell in the ultra-luxury housing category. Almost half of the total properties in this region were priced beyond a crore. All other zones had just 15-20 per cent of the share of their total properties in the said budget.

BHK-wise Distribution of Property

  • Similar to the previous quarter, 2BHK units captured more than half of the total market supply. However, supply of these units dipped marginally by three per cent in Apr-Jun 2015, as compared to Jan-Mar 2015.
  • High demand for homes in the mid-income segment contributed to the popularity and hence, supply of 2BHK units. Amongst all the properties priced within Rs 25-40 lakh (mid-income housing category), more than 80 per cent were configured as 2BHK units.
  • Bigger residential apartments, configured as 3BHK and 4BHKunits, gained from the dip in supply witnessed for 2BHK units. While supply for 3BHK units surged up by two per cent and stood at 28 per cent in the quarter ending June 2015, supply of 4BHK units crawled by a per cent and stood at five per cent in Apr-Jun 2015.
  • Luxury-housing segment (Rs 60 lakh–1 crore) captured maximum supply (36 per cent) of 3BHK units, followed by mid-income housing segment (Rs 25-40 lakh). The latter had about a quarter of the total inventory of 3BHK units.
  • Supply by construction status in Chennai_Apr-Jun 2015While 30 per cent of the inventory of 4BHK units was priced within Rs 1-2 crore, another 30 per cent was priced within Rs 2-5 crore - in the ultra-luxury segment.

Ready to Move in vs Under-construction

  • The city continued to supply more ready-to-move-in housing units as compared to under-construction properties. Almost 65 per cent of the inventory was ready-to-occupy in Apr-Jun 2015.
  • There was a slight increase in the number of under-construction properties in Chennai in the quarter ending June 2015. Almost two-third of these were available in South Chennai, owing to availability of land parcels and robust housing demand.
  • Out of the total under-construction properties in the city, maximum fell in the mid-income segment (Rs 25-40 lakh), followed by high-income segment (Rs 40-60 lakh).

 

 

 

Annexures

Capital
Values

Locality

Apr-Jun 2015

 %
Change

Capital
Values

Locality

Apr-Jun 2015

 %
Change

 

Adambakkam

6000

0

 

Thirumullaivoyal

3850

-9

Adyar

12650

2

Thiruvanmiyur

11850

-1

Ambattur

4400

-2

Thoraipakkam

6250

-4

Anna Nagar

11310

15

Urapakkam

3500

0

Arcot Road

7500

-4

Velachery

6900

-15

Arumbakkam

9500

-9

Rental
Values

Locality

Apr-Jun 2015

 %
Change

Avadi

3700

3

 

Adyar

26

4

Choolaimedu

7350

-14

Alwarpet

35

17

Chromepet

4900

-1

Ambattur

11

10

Guduvancheri

3400

-11

Anna Nagar

18

-5

Guindy

7100

9

Arcot Road

15

0

Iyyappanthangal

4350

-6

Ashok Nagar

19

-5

Kattupakkam

4300

0

Besant Nagar

29

16

Kelambakkam

4000

10

Chetpet

25

4

Kilpauk

12000

0

Choolaimedu

17

-6

KK Nagar

8200

-14

Chromepet

13

8

Kodambakkam

9100

7

ECR

21

5

Kolathur

5600

4

Egmore

31

19

Korattur

6450

11

GST Road

12

20

Kovilambakkam

4650

-5

Guduvancheri

10

11

Kovur

4200

24

Guindy

14

8

Koyambedu

6350

11

K.K. Nagar

21

11

Kundrathur

3900

11

Kelambakkam

11

22

Madambakkam

4000

0

Kilpauk

22

0

Madanandapuram

5450

11

Kodambakkam

21

5

Madhavaram

4550

3

Kottivakkam

25

-7

Madipakkam

5050

-10

Madipakkam

12

20

Manapakkam

5300

-5

Manapakkam

17

6

Maraimalai Nagar

3850

4

Medavakkam

11

10

Medavakkam

4700

-8

Mogappair

14

17

Mogappair

6800

10

Mylapore

32

7

Mudichur

3600

0

Nanganallur

14

17

Mugalivakkam

5550

6

Navalur

14

8

Mylapore

14500

-2

Nungambakkam

25

4

Navalur

4550

-6

OMR

12

0

Nungambakkam

12650

-6

Padur

12

0

Padur

3900

4

Pallavaram

12

9

Pallavaram

5150

1

Pallikaranai

12

9

Pallikaranai

5350

-6

Perambur

12

9

Pammal

4300

23

Perumbakkam

12

9

Perambur

6000

-2

Perungudi

15

0

Perumbakkam

4500

-1

Porur

13

8

Perungudi

6550

0

Royapettah

29

21

Poonamallee

3850

-3

Saidapet

20

18

Porur

5000

10

Selaiyur

12

20

Rajakilpakkam

4550

1

Sholinganallur

14

8

Selaiyur

5550

3

Siruseri

12

0

Sholinganallur

5400

3

T.Nagar

25

14

Siruseri

4200

0

Tambaram

10

0

Sithalapakkam

4100

8

Thiruvanmiyur

23

10

T Nagar

11400

-5

Thoraipakkam

17

21

Tambaram

4550

-11

Velachery

16

7

*All prices are per sq ft rates
*Capital values represent quarterly change
*Rental Values represent annual change


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  • Abhishek August 14, 20156:24 am

    This is very impressive report content wise.

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