6 yrs on, mild rise in sale of residential spaces in city

In 2018, the residential market of Chennai witnessed a 3 per cent year-on-year (YoY) growth in terms of sales, according to a half-yearly report released by Knight Frank India on Tuesday. During 2018, 15,986 units were sold while only 15,520 units were sold in 2017. “The sales were mostly concentrated in the Rs 30 lakh to Rs 50 lakh segment and the ready-to-move-in segment,” the report highlighted.

When comparing the sale of residential inventories in the second half of 2017 and the second half of 2018, Chennai recorded 11 per cent growth.

However, the city’s performance in the residential real estate industry is overshadowed by the cities such as Mumbai, National Capital Region (NCR), Bengaluru and Pune. 

“In Chennai, developers were holding back launches for better clarity on Tamil Nadu Combined Development Regulations (TNCDR) and Building Rules 2018, which will bring into effect the increase in floor space index (FSI) from 1.5 to 2 for all types of buildings in the state,” Kanchana Krishnan, Branch Director (Chennai), Knight Frank, said.

Similar to the growth witnessed in sales, 2018 ended in a positive note for the real estate industry in terms of the number of launches as the residential launches, too, recorded growth since 2012.

In terms of office space market, Chennai recorded a drop in supply of space up to 28 per cent in 2018 when compared to 2017. “New completions were at their half-yearly lowest since 2014 and witnessed an 81 per cent YoY drop in the second half of 2018,” the report stated.

However, the share of IT and IT-enabled services industry in absorbing the office space had bounced back in the year 2018 as the share of absorption had grown to 44 per cent in second half of 2018 from 25 per cent during the same period in 2017.

Collectively, Bengaluru, Mumbai, Hyderabad, NCR, Pune, Chennai and Ahmedabad recorded a 76 per cent growth in annual launches in 2018.