APPD Market Report Article

Chennai

February 28, 2022

0.9%

INR 30.9

N/A

Demand for high-end residential units remains stable

  • The changed dynamic towards home ownership, lower interest rates, stable market prices and various offers extended by developers in the festive season has helped the high-end residential market to sustain the growth witnessed in the previous quarter. Around 50 units of high-end residential apartments were sold in 4Q21.
  • The Central and Southern Suburbs together contributed 76% of high-end residential sales in the quarter.

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 lost over the course of the past few quarters.

Rents and capital values remained stable

  • The steady sales environment has kept prices mostly stable across all sub-markets in the high-end segment as developers are more keen to keep the momentum going as they look to offload unsold, ready-to-occupy inventories at a quicker pace.
  • During the festive season, to drive sales further and attract potential buyers, developers also rolled out various discounts and freebies to attract fence sitters.

Outlook: Sustained recovery on the cards

  • Although the growing rate of COVID-19 cases in the city does pose a threat to physical site visits and thus delay purchase decisions, the impact is set to be temporary. The state government has come up with several precautionary measures and booster vaccines in order to mitigate the risks posed by the virus.
  • With the driving factors expected to remain largely intact, the demand from NRIs is also likely to keep the momentum going in the high-end residential market in the quarters to come.

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

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