- Chennai real estate market remained grim on the back of meagre sales volume, limited new residential supply, economic instability and new governance.
- Non-availability of migrant labourers and rising raw material prices impacted the overall construction cycle.
- Housing sales fell by over 40 percent, QoQ. Home buyers’ affinity for projects nearing completion remained intact for units priced below Rs 40 lakh.
- Areas along Old Mahabalipuram Road, East Coast Road and Pallavaram Thoraipakkam Road posted maximum enquiries in the quarter.
- South Chennai reported the highest number of new launches, followed by northern quadrant of the city. Localities, such as Sholinganallur, Pallikaranai, Urur and Ambattur, reported the majority of new launches.
- With the work-from-home (WFH) culture and lockdown restrictions in place, rental market had been severely impacted in the studied quarter.
* Supply is basis properties listed on 99acres.com * Demand is basis queries received on 99acres.com
Chennai’s real estate market, in Apr-Jun 2021, remained slow on the back of meagre sales volume, limited new residential supply, economic instability and new governance. While COVID-19 induced lockdown halted a majority of construction activities in the city, the non-availability of migrant labourers and rising raw material prices in the city impacted the overall construction cycle in the studied period. In addition to the labour shortage, liquidity constraints and poor home buying sentiment remained the prime challenges for the developer community. Resultantly, as many as 1,590 units were sold in April-June 2021 as against 480 units in the corresponding period in 2020. Housing sales fell by over 40 percent, QoQ, from 2,850 units in Jan-Mar 2021.
Home buyers’ affinity for projects nearing completion remained intact, especially for units priced below Rs 40 lakh. Areas along Old Mahabalipuram Road, East Coast Road and Pallavaram Thoraipakkam Road posted maximum enquiries in the quarter.
The city currently sits on around 35,000 unsold housing units, majority of which belong to the luxury segment. With several proposed and in-pipeline infrastructure projects, the pace of inventory offtake is expected to witness growth. Some of these projects include the proposed metro corridors in Phase-2 (Corridor-3), Chennai-Bengaluru Industrial Corridor (CBIC), and the proposed second commercial airport at Parandur.
Key micro-markets across budget segments
|Localities||Average Property Prices||Average Rental Rates||Rental Yield|
|Within Rs 40 lakh||Guduvancheri||3,300-3,900||10||3.29%|
|Rs 40 lakh - Rs 1 crore||Madipakkam||4,500-5,300||12||2.88%|
|Rs 1 crore and above||Thoraipakkam||5,500-7,000||17||2.96%|
* Note: Rental Yield has been calculated for a 1,000 sq ft apartment. **Average property prices and rental rates have been calculated as per listings posted on 99acres.com in the studied quarter. ***The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments