Luxury apartments sales down by 30% q-o-q

• A q-o-q drop in Chennai’s luxury segment sales may be attributed to a significant decline in the segment launches in Q2. Despite this, there remains a healthy appetite for bigger homes by reputable developers at prime locations.
• The Off-Central submarket locations, like Guindy and Purasawalkam, accounted for most of the sales, followed by the Central submarket. Projects clocking healthy sales in Q2 were VGN Kensington, Rainbow Crystal Heights and Casagrand Mercury Phase 1.

Luxury apartments launches down by 83% q-o-q

• The luxury residential sector in Chennai experienced a significant decline in launches, down by 83% compared to the previous quarter. This short-term slowdown may be attributed to market fluctuations, regulatory changes and developer strategies.
• The Off-Central submarket accounted for most of the luxury segment launches, followed by the Central and Premium. Prominent launches in Q2 included Resolute Regent Court, Bhaggyam Cricket Villa, Bhaggyam Radha and Rainbow Crystal Heights.

Rents and capital values witness negligible q-o-q growth

• Luxury housing rents remained almost unchanged during the quarter, with a marginal 0.1% growth q-o-q.
• Capital values witnessed a marginal growth of only 0.3% q-o-q due to slower sales in the quarter. Affluent neighbourhoods, like Nungambakkam, Adyar and Saidapet, fetched higher prices, supported by their location.

Outlook: High-end residential demand is expected to improve in H2 2024

• Steady demand for luxury housing in the city, further backed by the festival season during the second half of the year, is expected to drive supply and demand.
• Subsequently, luxury property prices are expected to increase, particularly at locations benefitting from the upcoming Chennai Metro Rail Phase 2 and several road-widening projects in the city.