Housing demand remains steady q-o-q

• Chennai’s residential market recorded a 3% q-o-q sales increase in Q4, which marked an eleven-quarter high. However, sales momentum is expected to moderate as new launches stabilise in the upcoming quarters.
• Southern submarkets such as Pallavaram and Sholinganallur dominated sales activity, with the western submarket following. Prestige Pallavaram Gardens, Casagrand Mercury and Casagrand Sun City Phase-2 were among the top-performing projects in Q1.

New launches remain stable

• Q1 launches stayed flat q-o-q but fell 7% y-o-y, indicating a modest recalibration after 2025’s strong performance. Developers prioritised selective project inventory releases over volume expansion while assessing market absorption capacity.
• Southern suburbs and off-central areas led launch activity, collectively representing 75% of the city’s new units addition. Key Q4 launches included Brigade Stellaris, L&T Realty Avinya Enclave and Ramaniyam Sai Aranya.

Rising sales drive capital values upwards; rents also edge up moderately

• Housing rents edged up 1.8% q-o-q. Even as demand for completed, quality housing properties remains healthy, rents have remained range-bound.
• Capital values surged 11.9% y-o-y on strong sales activity through the year, with premium localities such as Velachery, Pallavaram and Porur commanding higher pricing due to strategic locations and well-developed social amenities.

Outlook: Residential sector poised for medium-term growth despite near-term supply constraints

• Launches are expected to remain subdued in the coming quarters as approval processes slow with impending state elections, with sales activity anticipated to moderate in tandem with the reduced supply pipeline.
• The housing market is expanding beyond traditional core clusters, driven by growing commercial office activity in suburban areas, creating diverse development opportunities for builders across multiple price segments and buyer profiles.