APPD Market Report Article
ChennaiMay 31, 2022
High-end residential sales more than double on a q-o-q basis
- Pent-up demand from high net-worth individuals (HNIs) and non-resident Indians (NRIs) along with competitive pricing drove sales activity in the luxury apartment segment. The aspirational need for larger homes with better amenities further contributed to the growth momentum.
- Almost 69% of the sales were in off-central and Southern Suburbs submarkets.
Healthy growth in launch activity
- New launches improved significantly in 1Q22 as developers took advantage of the demand surge for homes and buoyant buyer sentiment to roll out new projects. They also gave early discounts and incentives on new projects while offering attractive pricing schemes on older projects to push buyers towards a purchase.
- Around 63% of the new launches were concentrated in the Central submarket with the balance recorded in the Premium submarket corridor.
Capital values remain stagnant
- Residential capital values were largely unchanged across a majority of the actively selling projects in the luxury segment. We may see some escalation going forward if developers look to pass on the rising costs of raw materials, such as steel, cement and other items, to the buyers.
- Rents for high-end properties were largely unchanged, in line with the visible trend of the past year.
Outlook: High-end market expected to show sustained recovery
- The demand from NRIs and HNIs is likely to keep the momentum going in the high-end residential market in the quarters to come.
- Residential prices are excepted to increase by 4-5% in the coming quarters, with cost-push inflation due to rising material costs likely to make developers pass on some of the escalations onto buyers. However developers are expected to roll out various discounts and freebies to keep the momentum going.