Over the past three years, Chennai has been one of the better markets in India as far as the residential space is concerned. The year began with not so good sentiments across the country which also had its bearing on Chennai.
Sales during the initial quarter was sluggish, there was however some respite in between with a bit of liberalisation of rates happening, which propelled the momentum of purchases over the second half of the year. The last quarter has also been in line with the previous two quarters where sales have been moving gradually.
This year would see a total launch of 25,000 new units approximately across all price bands with an absorption having seen for roughly 65 per cent of the units in terms of bookings made and / or partial payments made.
There is demand seen though for a greater number but this demand is mostly felt in the price bracket of Rs 25-40 lakh, where the supply in the preferred locations hasn’t been to the mark.
That can be counted as one of the main reasons for some inventory to pile up as earlier periods. It would be good to note that the amount of completed stock, which is ready to be handed over for possession and has been unsold, is very negligible. It is only that the sales have been slow and it has become common place for people to confuse slow selling inventory under construction with the completed unsold inventory. Chennai will play a significant role in Indian residential demand at 30,000 units per annum for the next four years.
Demand for the right products at the right price has always been there and that has been a key driver across all price brackets for apartments. This will continue to be the headline to sum up the residential activity in Chennai for the next few years to come.
The interesting aspect to note here is that the southern markets of Bangalore and Chennai are predominantly end-user driven which is more the reason that price appreciation is moderate in the range of 10-12 per cent p.a. in general, and even lower at around 8-10 per cent in specific CBD locations.
As for infrastructure in the city, there have been a few new projects which have been announced like the construction of new bridges / flyovers across growth areas like East Coast Road, Old Mahabalipuram Road (OMR),