Chennai’s real estate market shows signs of recovery
Because of the lockdown restrictions, the residential market in Chennai, which had experienced a slump due to the pandemic, is recovering now. Real estate firms are waiting for new launches. According to estimates provided by real estate firm Knight Frank, the city-based developers managed to sell over 3,085 new properties between July and September. These stats were 4,240 during the same period last year. According to Knight Frank, analysis developers are innovating on marketing prowess to include financial benefits, discounts, and easy payment options to attract buyers during the lockdown, sales have seen an uptick in the third quarter of 2020 over the preceding one.
‘Demand for housing’
Sanjay Chugh city head (Chennai), ANAROCK Property Consultants said “The lockdown resulted in a slow-down in the demand for housing. Homebuyers who were sitting before COVID-19 have come back in the market to take advantage of the reduction in interest rates on home loans and the availability of ready-to-move-in properties. “Residential properties [apartments/plotted land] priced at ₹25 lakh-₹75 lakh are seeing the maximum traction from homebuyers in suburban areas. Because of the work-from-home option, people prefer larger apartments in the suburbs. Besides that the customers are willing to travel a little far to buy a larger home to accommodate a dedicated working space within their houses,” he added.
Padam Dugar, the vice-chairman and managing director of Dugar Housing Limited and president of the Confederation of Real Estate Developers’ Associations of India (CREDAI)-Chennai chapter said the post-pandemic home had become more like a necessity than an investment. “Lower home-loan interest rates have helped sales in the city. It will get a better boost if the Tamil Nadu government comes out with some incentives by reducing the stamp duty,” said Prakash Challa, chairman and managing director of SSPDL.
Chennai’s residential real estate market has also seen an increase in launches, from 182 units in the second quarter of 2020 to 1,487 in the third, according to data provided by JLL Research (the comparison pertains only to the last two quarters, since the current crisis has no parallel, and has infused uncertainty that has not been witnessed in the past decades).
The western suburbs like Porur, Ambattur, and Padi has accounted for nearly 80% of the launches during the quarter. Furthermore according to the JLL’s data residential real estate witnessed pent-up demand, translating into sales, and 1,570 units were sold during Q3 2020. Sales were concentrated in the southern (Padur, Navalur, Perumbakkam, and Kilkattalai) and western suburbs, which contributed over 80% to the quarter.
Maximum sales traction was seen in the affordable and lower-mid segments. Subsequently, inquiries for larger-sized homes from a certain section of prospective buyers have also witnessed a rise. This happened because the preferences have for homes with more open spaces and study rooms.
“There has been a marginal decline in unsold inventory during the quarter, as sales outpaced launches. While quoted residential prices remain stagnant, developers are offering various financial schemes, low booking amounts, and other freebies to attract homebuyers,” said Siva Krishnan, managing director, Chennai, JLL India.
Two real estate developers said they sold properties after relaxations in lockdown norms, but consumers were on a bargaining spree. One of them said he had to give lucrative incentives to make sure that the consumer picked his space. “Inquiries are coming in, and demand is picking up at a slow pace,” he added. Most developers said with work-from-home options, consumers now wanted better spaces of their own.
