Apartment sales down marginally by 5% q-o-q

• A 5% q-o-q drop in Chennai’s sales was due to fewer launches in Q3, with sales otherwise up a healthy 15% y-o-y. Demand for larger homes in prime locations stayed strong. While overall sales fell q-o-q, the Southern submarket saw a 14% increase over the same period.
• The Southern Suburbs accounted for over 60% of quarterly sales, followed by the Western Suburbs and Off-Central submarkets. While the Suburbs catered to value and mid-income buyers, Central benefitted from major premium segment launches.

Apartments launches down by 13% q-o-q

• Chennai’s residential sector experienced a 13% q-o-q decline in launches, largely due to market fluctuations and developer strategies, but grew 45% y-o-y. Despite the overall dip, the Southern submarket saw a 4% q-o-q increase from one large project launch.
• The Southern Suburbs submarket accounted for 76% of Chennai’s apartment launches, followed by the Western and Central submarkets. The quarter saw major launches like TVS Emerald Udyana Phase 3, LML The Luxe One and Casagrand Osaka.

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

• Housing rents rose the most in Southern Suburbs, driven by demand from working families, and as a result, overall rents rose by 1.1% q-o-q.
• Capital values increased by 3.6% q-o-q, supported by robust growth in suburban clusters and the Central submarket. Improved connectivity and strong mid- and high-end demand drove a 16.4% y-o-y price rise across the city.

Outlook: Consistent sales traction to support price momentum in the sector

• Suburban clusters were expected to drive launches and sales, with premium projects likely in Central and Off-Central areas. Market activity is set to expand to new prime corridors, supported by commercial growth, infrastructure improvements and premium developments.
• Rents and capital values in the segment are expected to rise in the medium-term, backed by Metro Phase 2 connecting suburban locations with core city and prominent office and retail hubs.