Over the last one year, the residential real estate market in Chennai showed signs of revival post the slowdown phase that was triggered by natural calamities, political instability, and demonetisation. As 2017 draws to an end, RoofandFloor analyses nine major trends that defined the year.
1) ‘Real buyers’ back in the market
Last year’s surgical strike against black money transformed the real estate market into a buyers’ paradise. And Chennai realty market is no different. While the majority of speculators had already started to look at other asset class for investment, the remaining were taken aback with the announcement pertaining to second property in the Union Budget 2017-18.
To encourage home ownership for self-use, the ruling in the budget stated that, “under Section 71 of the Income Tax Act, the owner of the second home can now just set-off an amount of up to Rs 2 Lakh as against no cap earlier.”
This further made Chennai realty market a paradise for genuine home seekers. A closer look at the data for the last three quarters (Q1, Q2, and Q3 2017) indicates that a whopping 79% home seekers were looking to buy a property for self-use as against investment.
2) Suburban micro-markets are most preferred
With rising property values and land parcels getting exhausted in the city-centre, homebuyers’ interest was skewed towards suburban micro-markets in the third quarter of 2017.
Interestingly, the majority of these micro-markets were either close to IT/ITeS hubs or enjoy seamless connectivity to these employment hubs.
3) South Chennai: the most preferred zone
If we look at zone-wise data, South Chennai recorded the maximum demand owing to the presence of IT/ITeS companies. Interestingly, the southern part of the city also recorded the maximum supply of affordable properties in Q3 2017, followed by the western part of the city.
These include markets such as Singaperumal Koil, Sholinganallur, Medavakkam, and Kelambakkam, amongst others.
As per our data, out of the total units launched in South Chennai in Q3 2017, nearly 29% were in the affordable segment.
These projects were priced anywhere between Rs 2,200 to Rs 3,400 per sq. ft.
4) Infrastructure: a game changer
Infrastructure projects like the upcoming Metro corridor and the revival of the Port Maduravoyal Road have boosted residential demand in micro-markets like Virugambakkam, Perumbakkam, T Nagar, Perambur, and Medavakkam.
Further, larger projects like development of Ponneri as a Smart City and the Chennai -Bangalore Industrial Corridor (CBIC) are also likely to enhance the appeal of Chennai realty market.
5) Ready-to-move-in properties rule the roost
This can also be attributed to a shortage of RERA-approved under-construction projects in the city.
6) Apartments are most-preferred property type
Apartments continued to dominate the property spectrum in terms of both supply and demand. Nearly 49% homebuyers’ interest was slated towards apartments in 2017 as well. This was followed by plots, villas, and other property types.
Buoyed by the higher return on investment, about 28% property seekers also showed interest in plots and layouts.
7) Increasing number of women homebuyers
A closer look at RoofandFloor data suggests that out of the prospective homebuyers searching for properties on the portal, there is a good mix of men and women in Chennai.
While men lead the show, women are not far behind. Interestingly, the majority of women homebuyers in the city belong to the Information Technology (IT) sector, followed by women who are self-employed.
8) Affordable segment gaining popularity
While properties in the mid-segment had a clear dominance in Chennai realty market, the affordable segment also grew at a consistent pace.
As per our data, out of the total projects launched in 2017 (Q1-Q3 2017), nearly 45% catered to the mid-segment (between Rs 40-80 Lakh), followed by 29% in the affordable segment (within Rs 40 Lakh), and 26% in the premium segment (Rs 80 Lakh to 1.5 Cr).
9) 2BHK preference
The housing demand in Chennai is largely fuelled by the IT/ITeS, manufacturing, and automobile sectors. Thus, as per the BHK configuration, 2BHK units were most preferred, followed by 3BHK units. Interestingly, larger configurations in 4 and 5BHK also recorded decent demand.
