APPD Market Report Article


August 26, 2022

Dr Samantak Das, Head of Research, India & Sri Lanka


INR 30.3


High-end sales marginally down by 10.2% q-o-q

  • The waning pandemic and incentives offered by the developers continue to positively influence the residential market, which remains on the recovery track. With developers passing on the rise in input costs to buyers, apartment sales fell q-o-q.
  • The sales were higher than the new launches during the quarter in the high-end segment, clearly indicating the improved buyer sentiment for bigger homes. The new launches were all in the central submarket and 65% of the units sold were concentrated in the central and off-central submarkets.

Supply is concentrated in the central submarket

  • The quarter recorded an 83% drop in new launches q-o-q. All the new project launches were concentrated in the central submarket during the quarter.
  • Developers are expected to continue offering early discounts and incentives on new projects and offer attractive pricing schemes on older projects to push buyers toward a purchase.

Capital values increase 3% q-o-q

  • The increase in construction costs among other factors has influenced the increase in capital values. Capital values may see another round of increase, by 4-6% in the upcoming quarters.
  • Rents for high-end projects remained stable.

Outlook: Key residential hubs to drive supply and sales

  • The demand for high-end residential apartments is likely to hold steady, although there may be some short-term disruption due to increases in prices. However, the advantage of the falling rupee could spur non-resident Indian (NRI) buying activity.
  • Prices in the high-end segment may inch up more, but at a slower pace as developers are keen to maintain buying momentum.

Note: Chennai Residential refers to Chennai's prime residential market.

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