The complete overview of the Chennai real estate market. The in depth study conducted by Indiaproperty.com, includes all the information that every individual interested in Chennai city will love to follow.
The best place to buy new property www.IndiaProperty.com
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Chennai residential market march 2013
1.
2. OVERVIEW
Chennai real estate market has been stable with moderate price
appreciation of 8 – 10% in 2012. With inprogress infrastructure projects
taking shape, the demand and capital values are expected to rise across
all sectors. Focus on improvement of public modes of transport has been
one of the major highlights in Chennai. This is evident from the expansion
of the existing highways, work on Chennai Metro and the Outer Ring
Road.
Approval of three new bridges connecting ECR and OMR at Neelankarai,
Palavakkam and Kottivakkam is expected to impact the capital values.
Going forward growth in Chennai would not solely be determined by the
IT/ITES sector, but also the transport corridors of the above mentioned
infrastructure projects. Chennai market is looking forward to the MRTS
and BRTS projects to give the city a new face in 2014-15.
2012 has seen the city shift investor focus from the usual OMR, ECR to
the WEST and NORTH of Chennai. The operationalization of the TIDCO &
Ascendas SEZ at Tiruvallur and the operationalization of the new airport at
Sriperumpudur in 2015 is driving interest in the North & West Chennai
regions.
STOCK AND ABSORBTION
Global uncertainties and IT/ITES sector going slow with their expansion
plans impacted the real estate scenario in Chennai with high vacancy rate.
Though the focus on residential sector from developers end was high, and
Chennai market saw remarkably high number of new launches in 2012.
Sales were moderate in comparison to the new residential supply added to
the market. In 2013 Chennai residential market is likely to see few
launches compared to 2012 but improvement in sales with an overhang of
18-22 months.
Going forward growth
in Chennai would not
solely be determined
by the IT/ITES sector,
but also the transport
corridors of inprogress
projects
3. Chennai Residential Market Zone Wise Distribution of Stock
Source: IndiaProperty
Chennai Under-Construction vs. Ready to Occupy Stock
Source: IndiaProperty
South Chennai Residential Market Absorption - Stock and Availability
Source: IndiaProperty
1% 15%
68%
16%
CENTRAL NORTH SOUTH WEST
0
5000
10000
15000
20000
CENTRAL NORTH SOUTH WEST
Ready 2 Occupy Under Construction
0%
10%
20%
30%
40%
50%
60%
70%
0
2000
4000
6000
8000
10000
12000
Less than
30 Lacs
30 - 50 Lacs 50 - 75 Lacs 75 - 1 Cr Above 1 Cr
No. of Total Units % of Available Units
What we see is in
South Chennai,
across all budget
ranges more than
50% units are
available indicating
piled inventory
If the current
sluggish growth of
IT/ITeS sector
continues South
Chennai is
expected to face an
oversupply
situation. Another
area of concern is,
lack of basic
infrastructure
4. The above graphs highlight the current residential market scenario of Chennai.
With maximum new launches and construction happening around OMR and
GST Road belt, South Chennai is seeing maximum growth. Concentrating on
South Chennai, for all the budget ranges more than 50% units are available
indicating piled inventory.
If the current sluggish growth of IT/ITeS sector continues the area would face
an oversupply situation. Moreover, lack of basic infrastructure (roads, water,
and sewage system) would heighten it further.
CAPITAL VALUES
Residential Property Rates for Mid Segment Properties in Major Micro Markets
in Chennai:
MICRO MARKET CAPITAL VALUE (INR psft)
Porur 4500 - 5000
Guduvanchery 3000 - 3200
Vandalur 3000 - 3300
Oragadam 2800 - 3500
Navalur 4500 - 5000
Medavakkam 4300 - 4500
Akkarai (ECR) INR 2 – 2.5 Cr (Only Villa Projects)
On comparing the prevailing market rates in Chennai residential market to the
property rates consumers are ready to pay; micro markets Medavakkam,
Guduvanchery, Oragadam and Vandalur have comparable pricing.
The increase in pricing of Porur and Navalur residential market over past four
quarters has led to a demand and supply mismatch. What is typically seen is
when prices increase in a certain market, it forces the mid income buyer
segment to shift focus to lower priced micro markets.
In 2013 we expect these markets to have stable pricing.
5. Price Preference of Consumers for Various Micro Markets in Chennai – Overall Pricewise
Source: IndiaProperty
Chennai Popular Micro Markets Pricing Preference by Consumers – On Basis of Rate psft
Source: IndiaProperty
0%
20%
40%
60%
80%
100%
120%
Less than 30 30 - 50 Lacs 50 - 75 Lacs 75 - 1 Cr Above 1 Cr
0%
20%
40%
60%
80%
100%
120%
Less than 2000 psft 2000 - 3000 psft 3000 - 4000 psft
4000 - 5000 psft Above 5000 psft
Over the past four
quarters Porur and
Navalur have been
hot markets and
have seen an
increase in pricing
6. DEMAND FOR TOP LOCATIONS IN CHENNAI
VELACHERY
SHOLINGANALLUR
MEDAVAKKKAM
URAPAKKAM
TAMBARAM
PORUR
AMBATTUR
Chennai Demand for Popular Micro Markets over Last Three Quarters
Source: IndiaProperty
MARKET TRENDS
The suburban micro markets of Porur, Poonamallee, Pallavaram, Chrompet and
Tambaram which witnessed fresh launches in 2012 are expected to appreciate by
7 – 10 % in 2013. Other micro markets to look for are Ambattur, Avadi, Kolathur,
Madipakkam, Medavakkam, Pallikaranai, Thiruporur, Urapakkam, Velachery.
Q 3 (Oct – Dec 2012) - Chennai Micro Market Ranking for Consumer Demand
Source: IndiaProperty
0% 1% 2% 3% 4% 5% 6%
Porur
Tambaram
Medavakkam
Ambattur
Urapakkam
Kolathur
Chrompet
Velachery
Madipakkam
Poonamallee
Sholinganallur
Kelambakkam
Siruseri
Iyyapanthangal
7. Q 3 (Oct – Dec 2012) - Chennai Preference towards New and Resale Properties
Source: IndiaProperty
Time Frame in Which a Consumer Desires to Make Property Purchase
Source: IndiaProperty
0%
10%
20%
30%
40%
50%
60%
70%
80%
New New/Resale Resale
0 1000 2000 3000 4000 5000 6000 7000 8000
<2 Months
<4 Months
<6 Months
>6 Months
Qtr3 Qtr2 Qtr1
Preference trends
for new and resale
properties have
beaten the
conventional
notion that
consumers prefer
only new houses –
focus on budget
Shift seen in
consumers’ intent
to make property
purchase – wait
and watch strategy
8. Chennai Price Movement Consumer Budget Preference
Source: IndiaProperty
Focus of buyers in Chennai residential market over last three quarters has been
on 2BHK properties with 35% consumer demand having a budget of INR 30 –
50 Lacs. This indicates need for more and more affordable and mid income
residential properties in the city. Properties of Rs 1 Cr show only 10% demand.
Q 3 (Oct – Dec 2012) - Chennai Unit Type Preference
Source: IndiaProperty
Investors go to areas which have potential end-user participation. Increase in
number of buyers concentrating on mid segment residential properties, has led
0
1000
2000
3000
4000
Lessthan30
30-50Lacs
50-75Lacs
75-1Cr
Above1Cr
Lessthan30
30-50Lacs
50-75Lacs
75-1Cr
Above1Cr
Lessthan30
30-50Lacs
50-75Lacs
75-1Cr
Above1Cr
1 BHK 2 BHK 3 BHK
Qtr1 Qtr2 Qtr3
1 BHK 2 BHK 3 BHK 4 BHK 5 BHK
Focus on 2BHK
properties - 35%
consumer demand
seen within budget
of 30 – 50 L
Clear indication
seen for affordable
and mid income
residential
properties
Shift in demand for
2BHKs with over
65% consumer
demand
9. to 2BHKs being the most preferred unit type in Chennai with over 65%
demand over last three quarters of 2012.
This trend is generally seen with most investors eyeing potential rental income
from 2 BHK residential units which are easy to rent.
CONCLUSION
In 2013 Chennai real estate market is expected to see stable growth with
moderate appreciation. The residential market is likely to see few launches
with focus on reduction in the inventory overhang which currently lies between
6 – 8 quarters. With heightened Government’s focus on improving the
infrastructure scenario, an increase in interest for commercial as well as
residential properties is likely to be seen.
With an eye
towards potential
rental income,
preference for
2BHK units is more