It's sunny days for home buyers in Chennai

CHENNAI: The Chennai residential market is poised for massive growth in the coming years, on the back of major infrastructure projects like the Chennai Metro Phase 2, peripheral ring roads, and the upcoming industrial corridors. These will further boost realty prospects across the city.

Sanjay Chugh, City Head, Chennai, Anarock Group tells us, “If we consider data trends, Chennai has seen remarkable growth in both new launches and housing sales in the first nine months of 2023 as against corresponding period in 2022. Chennai witnessed a new supply of approx. 14,510 units in nine months 2023 (Jan-Sept) while in the corresponding period of 2022, the city saw approx. 6,930 units launched, thereby growing by a whopping 109% in the period. As for housing sales, the city witnessed 33% growth in the period – from 12,290 units in nine months of 2022 to nearly 16,310 units in nine months of 2023.”

It is worth noting the rise in material/input costs over the past few years, which has translated into the prices of homes in Chennai as well. Average residential prices in the city have witnessed a 17% rise in the last five years – from Rs 4,935 per sq. ft. in Q3 2018 to nearly Rs 5,770 per sq. ft. in Q3 2023.

When asked about the uptake in the luxury segment, Chugh says, “Of the 16,310 units sold in Chennai across all budget segments, approx. 3,325 units were sold in the luxury segment priced over Rs 1.5 cr. This is nearly 20% of the total sales share. Back in the corresponding period of the nine months of 2022, the share of the luxury units was nearly 11%. This clearly indicates the growing demand for the luxury homes in the city.”

On a broader scale, the residential sector pan-India is expected to remain buoyant in the festive quarter (Oct-Dec). The recent unchanged repo rate by the RBI is a festive bonanza for prospective homebuyers and gives them yet another opportunity to make cost-optimized home purchases.

If we consider the present trends, the overall consumer market looks bullish across sectors, particularly the automobile and housing sectors, which in many ways reflect the health of the economy. We are entering the festive quarter with a very strong momentum in housing sales, and unchanged interest rates will act as a major catalyst for growth in the residential market.

As many as 92,170 units were sold last year during the festive quarter - Q4 2022 (Oct.-Dec.). This year, we anticipate that it would grow by at least 10-15% than the previous year. The fact is that besides just the end-users now even several investors with the financial wherewithal are coming forward to take the plunge since new supply is dominated by the large and listed developers.

These large and listed players exhibit a sense of security and render confidence among the homebuyers. More so, these Grade A (large and listed) developers have a healthy pipeline of new launches lined up for the festive quarter since they are reporting high sales despite a price rise.