In 2018, Chennai witnessed a steep increase in new launches of the affordable housing segment (units priced less than ₹40 lakh) and this is expected to continue in the coming years as affordable housing is attracting more traction across the nation due to the government’s push with GST incentives.
According to a report, ‘Chennai: from resilience to growth’ by Anarock Property Consultants, the increase in launches in the affordable segment is due to a slight reduction in prices and a general reduction in the configuration of housing unit sizes. Corresponding to launches, the unsold inventory is highest in the mid segment (₹40 lakh – ₹80 lakh) with 41% and followed by affordable housing segment with 41% and 32% respectively as of Q4 2018.
Marginal decline in prices
Chennai has experienced a marginal decline in property prices during the past few years. Over the last four years, the price correction has been 2% and 3% from its peak. The average price in the city at present is ₹4,900 per sq ft. The unsold housing stock in Chennai is estimated at 30,800 units against 73,300 units in Bengaluru, the report said.
The average property prices in the city have been the lowest in four years at ₹4,920 per sq ft. Over 72% of new supply in the last six years has been in the under ₹80 lakh budget range.
Private equity investments in Chennai in 2018 stood at $576.67 mn, an increase of 15% over 2017.
West Chennai emerged as the city’s best residential market with high absorption-to-supply ratio. It took only 7.7 quarters to bring its unsold inventory to the lowest across the city.
Most buoyant locations
Oragadam, Avadi and Ambattur have been among the most buoyant real estate locations in the metropolitan area, with corridors of Pallavaram – Thoraipakkam in the south zone emerging as the next preferred destinations with IT-ITeS planning its next level of expansion there.
According to the study, 87% of buyers in Chennai opt for ready-to-move in apartments or projects nearing completion.
Housing and Urban Development Secretary S. Krishnan said the Tamil Nadu Combined Development and Building Rules had focussed on affordable housing. “Policy making has to be evidence based,” said Mr. Krishnan.
The report was released at ‘RECON 2019’, the annual conference of TNRECA (Tamilnadu Real Estate Consultants Association), along with Anarock Property Consultants as knowledge partner.