APPD Market Report Article
ChennaiDecember 1, 2021
Sales of high-end residential units witness a surge in 3Q21
- Chennai’s economy began to unlock owing to subdued COVID-19 cases in tandem with a robust vaccination pace. The city was quick to recover from the second wave of COVID-19 as compared to the first wave. The quarter saw a revival in Chennai’s high-end residential market, which registered a 61% increase in sales volumes q-o-q, aided by the affordable synergy created in the market.
- Homebuyers preferred ready-to-occupy properties over under-construction properties to mitigate risk delays. Also, the demand for large homes is immediate and has increased, with buyers needing additional space and flexible configurations to set up home offices and space for e-learning. The Southern and Central submarkets together contributed 80% of the sales activity.
Developers curtail new launches to balance demand-supply dynamics
- No new launches were witnessed in the quarter.
- Developers remained cautious in launching new projects as they are focused on offloading their unsold inventory and recovering sales volumes of the past few quarters.
Rents and capital values remain stable
- The relatively fewer launches amid steady sales have helped to keep prices stable across all city submarkets as developers offload unsold, ready-to-occupy inventories at a quicker pace.
- With the festive season around the corner, developers have been offering various discounts, such as straight-up price discounts, deferred payment plans and other incentives like no pre-EMIs for under-construction properties, waiver of floor rise and car parking charges, free home furnishings, and attractive gifts to entice fence-sitters and prospective homebuyers.
Outlook: Residential sector set to witness sustained recovery
- High-end residential sector is expected to witness sustained recovery in the coming quarters as home ownership has now become a priority in these unprecedent times. The affordable synergy created in the market from the reduction in home loan rates coupled with the festive season and improved market sentiments augurs well for the residential sector.
- With the residential prices holding steady and the easing of lockdown measures along with various incentives offered by developers, the residential market is started to witness an upward trajectory.