Chennai residential property trends : 2009
The year 2009 started with gloom, painted all over the real estate sector. All industry players had written off the realty sector till 2011. Every constituent of the industry (Developers, Realtors, Lenders and property seekers) felt the negative impact of the slowdown. Fortunately for us, the gloom was short lived and the signs of revival were visible as we approached April-May’09. At Makaan.com, we conducted an extensive analysis of the residential real estate market covering the cities of Mumbai, Delhi/NCR, Bangalore, Hyderabad, Chennai & Kolkata. Some highlights for 2009 & projection for 2010 are given below
Chennai position on national real estate landscape : Chennai emerged as the 5th most popular property hotspots in the country just behind Mumbai, Delhi/NCR, Bangalore & Hyderabad. It accounted for 4.7% of the total property demand in the above cities (demand being equal to number of searches conducted on Makaan.com). Within the city of Chennai, 58% of the demand came from Chennai south, 16% from Chennai north, 15% from Chennai central and 11% from Chennai west.
Growth from Jan to Sept’09 : Chennai saw a slow but sturdy growth in demand in the first six month. The numbers of searches conducted on Makaan.com during Jan-March quarter for Chennai were 2.00 lac; which grew to 2.15 lac during the April-June period (a quarterly growth of 8%). With the Indian economy showing signs of revival and people becoming increasingly sure of their future earnings; there was a surge in property demand during the July-Sept period. The number of searches grew to 3.24 lac during this period; a respectable increase of 62% over Jan-March quarter.
Growth in affordable housing : Another highlight of 2009 was the focus on affordable housing (housing under 40 lac). This focus was not only from property seekers but also from developers. They recognized the fact that the real demand was in this segment and that it makes sense to concentrate here.
If one looks at the data above, 83% of total demand in Chennai is for affordable housing. The mid segment (40-75 lac) demand is around 10%. The demand for high end (75-100 lac), luxury (100-200 lac) and super luxury (>200 lac) is 2%, 2% and 3% respectively. Over the course of 2009, affordable segment & mid-segment demand have shown impressive growth in Chennai.
Projection for 2010 : As per Makaan.com, the following trends will unfold over the next 12 months,
1. Demand for residential homes in Chennai will continue to rise but the pace of growth will get muted.
2. The property prices are projected to move in a narrow range and will not see any major fluctuation either on the up or down side.
3. The demand would be highly elastic i.e., every attempt of a price increase will be met by a fall in demand.
4. The bulk of the demand will continue to be in the affordable and mid-segment.
5. The demand for Super Luxury housing (budget over 200 lac), which is largely driven by the NRI & affluent population, is likely to continue.
6. Demand for “ready-to-move-in houses” will grow over “new project”.
7. Known developers, with proven track record of project delivery, will find favor over less established once.
8. More real estate companies will get listed on the stock exchanges bringing in more accountability and transparency.