Chennai’s Real Estate Sales to Up By 6 Per cent – YOY Report

Home sales in Chennai in 2019 reported a positive growth amid price correction and reduction in inventory, while office space segment saw high transactions during the year, claimed a report of real estate consulting firm Knight Frank India.

“The calendar year 2019 was a year of much-awaited stability and recovery for Chennai’s residential real estate, with sales rising by six per cent year-on-year to 16,959 units in 2019 and launches rising by 11 per cent to 11,542 units, the company said while presenting the highlights of 12th edition of its report — India Real Estate: H2 2019 — which covered residential and office market performance across eight major cities for the July-December 2019 (H2 2019) period.

“A good traction was seen in the ₹30-50 lakh residential segment during 2019 though price correction continued. The major highlight of the Chennai residential growth was supply matching the demand,” said Srinivas Anikipatti, Senior Director – Tamil Nadu and Kerala, Knight Frank India.

Chennai residential market saw a price correction in high single-digit. Unsold inventory in the Chennai residential market fell 28 per cent to 13,610 units in 2019. The age of inventory is now 15 quarters.

Sales remain concentrated in a select few segments – sub-₹30 lakh ticket size, the stilt plus four apartment structures, villas in the range of ₹1-1.5 crore, and plots.

The sub-₹30 lakh ticket size has been and continues to be the most transacted residential segment in the Chennai market. The segment continues to flourish, though the liquidity crisis seems to be creating some hindrance, said the report.

Anikipatti said a new trend was shaping up in the Chennai residential market where developers were giving out an entire block from their constructed residential project to co-living players. This arrangement was helping developers bring in cash flow for the time being.

On the new launches, about 59 per cent of the total launches in H2 of 2019 fell in the sub-₹50 lakh category.

Office space

Office transactions in Chennai were at an all-time high of 5.2 million sq ft in 2019, registering a 50 per cent increase over 2018, mainly driven by IT and ITES sectors.

Supply grew 31 per cent in 2019 as a total of 1.7 million sq ft of new office space entered the market.

As IT/ITeS activity continues to grow and as new supply keeps coming, the Chennai Office market’s present growth momentum is slated to continue and increasing Office market activity will continue to aid the growth momentum in residential real estate, he said.

(Source: Hindu BusinessLine)