FUTURE OF REAL ESTATE IN CHENNAI
Real estate prices and rental rates in South India are exceptionally budget friendly as compared to their metropolitan counterparts, like Mumbai that have abhorrent property rates. The Chennai real-estate market enables long-term investment and ensures good returns, owing to the fact that they offer reasonable pricing without compromising on the space, amenities and also gives access to both, a fast-paced urban lifestyle or a leisurely suburban life.
Chennai’s demographic like most urban areas represent the fact that people move where the work is. This growth has also been catalysed by the expansion of surrounding areas of the city. To match pace with the increasing demands, Chennai has been investing significantly in infrastructure and residential neighbourhoods. While the city has always been famous for its cultural heritage, the capital of Tamil Nadu has fostered a host of multinational companies and has welcomed hundreds and thousands of young professionals.
The city is also a forerunner in educational institutes, automobiles, and healthcare. Some of the significant areas here are Sholinganallur, Old Mahabalipuram Road, Korattur, Orgadam, East Coast Road, Anna Nagar, among others. In this blog we’ll talk about the recent trends in Chennai real-estate and what the coming future looks like.
|A snapshot of the Chennai real estate market for the first three quarters of 2022 according to analyst Abhinav Vats|
|Chennai’s real estate market has witnessed an increase in both residential sales and average selling price since 2021. Especially the flats in Chennai for sale have seen a considerable increase in demand.|
|Plotted development and budget friendly apartments have been popular among homebuyers. Demand for properties ranging approximately between 1100-1300 square feet was the highest.|
|Enquiries registered a surge of 20 percent in the ready-to-move category. 2, 2.5 & 3 BHK flats in Chennai have remained the popular choice among people looking to buy.|
|Over 40 percent of the sales came from residential units within Rs 50 lakh, making it the most sought-after budget category.|
|Maximum number of apartments, specifically 3 BHKs priced over 1 crore and above were from the upscale location of Sholinganallur in South Chennai and the suburban area Porur.|
|The highest number of new projects registered under the state RERA came from the localities of Arakkonam, Chengalpet and Thiruporur.|
According to leading real estate companies Chennai, the housing market in the city is to peak in 2023, accounting for 6% of sales and 8% of the new launches in the country. This reason behind the boost will result from the unprecedented rise in homeownership sentiment, adoption of technology and digital marketing, and innovative business practices, which have all cushioned the impact of the pandemic on the Indian residential sector.
The Chennai residential market is going to be on a strong foot. Leading real estate companies Chennai have noted that the demand for luxury residential properties for both buying and renting especially in upscale localities has increased.
- The average rent in Anna Nagar has risen by 13 per cent to Rs 63,000 from Rs 56,000 a month. Capital prices have increased by 5 percent to Rs 11,850 per square feet from Rs 11,300 for every square feet.
- Capital prices have spiked up by 4 percent to Rs 14,000 per square feet. With the impact of the pandemic gradually wearing off, the real estate market will show a perpetual upward trend.
- Even with the inflation in property taxes, homebuyers will continue to show interest in investing in residential real estate.
- People are especially looking to buy flats in Chennai. South Chennai, which contributed approximately 50 percent of the total new launches in the city in 2022, will house most of the new residential societies, at least till the first quarter of 2023, especially in the areas of Perumbakkam, Sholinganallur, Mylapore and Thiruvanmiyur.
- The rental market that had seen a major dip during the pandemic is slowly reviving with colleges opening, and most companies moving to either work from office or a hybrid working model, encouraging employees and students to come back to the city. These rental vacancies are yet to go down further with the available inventory in the market still overruling the demand.
- The lookout for Korattur apartments and Anna Nagar apartments is also in the purview of a spike.
- With the announcement of developing new satellite cities around Chennai and the trimmed process of multistorey buildings, more residential launches are to be expected in the following quarters.
Post the pandemic, businesses are picking up and companies are hiring more employees, especially the IT sector. Moreover, with organisations starting to work from offices and going to the pre covid norms with the hybrid model of working, the demand for office spaces is going to increase.
According to leading Chennai real estate builders, major learnings from the pandemic has been to remain flexible and adaptable for any uncertainty. This has reinforced the need for agility in the working spaces that would be best suited for business requirements. Companies are increasingly leaning towards coworking spaces for the ease, amenities, and flexibility they offer. This will drive the demand for coworking office spaces in the near future.
The recent months have also observed a boom in the e-commerce market which is expected to translate into a growth in the demand for warehouses and inventory management infrastructure. As per digital real estate marketplaces like Clicbrics, 2023 will see a growth of approximately 36 percent in warehousing sector as compared to 31 percent in 2021.
Virtual house hunting
The proliferation of digital media of transaction and communication has benefited the real estate market in terms of enabling lead generation, site visits, and even conversions. The pandemic further justified the role and requirement of digitisation and accelerated the use of the same. Top real estate builders Chennai state that the use of virtual tours, 3D tours, drone videos and even augmented reality have become sought after ways to market and sell property. People looking for apartments in Chennai for sale or plotted developments are able to buy and sell property without being physically present.
The real estate trends are interconnected with the culture and lifestyle of the city. With the increase in nuclear families, the demand for single-family houses and their prices have shot up since 2020 and are likely to remain high throughout 2022 to 2023 and maybe even in the coming years.
With the onset of the pandemic and the two years of debacle that ensued, people reevaluated their investment decisions that reflected in the drop in demand and prices of real estate. However, with the pandemic gradually retreating the prices of properties have increased again and the seller market is witnessing an upward trend. Buyers are willing to pay a substantial amount for homes or commercial spaces that meet their requirements. Hence, as long as the market values increase the home equity will also increase.