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Chennai residential market march 2013
Chennai residential market march 2013
Chennai residential market march 2013
Chennai residential market march 2013
Chennai residential market march 2013
Chennai residential market march 2013
Chennai residential market march 2013
Chennai residential market march 2013
Chennai residential market march 2013
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Chennai residential market march 2013

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The complete overview of the Chennai real estate market. The in depth study conducted by Indiaproperty.com, includes all the information that every individual interested in Chennai city will love to …

The complete overview of the Chennai real estate market. The in depth study conducted by Indiaproperty.com, includes all the information that every individual interested in Chennai city will love to follow.
The best place to buy new property www.IndiaProperty.com

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  • 1. OVERVIEW Chennai real estate market has been stable with moderate price appreciation of 8 – 10% in 2012. With inprogress infrastructure projects taking shape, the demand and capital values are expected to rise across all sectors. Focus on improvement of public modes of transport has been one of the major highlights in Chennai. This is evident from the expansion of the existing highways, work on Chennai Metro and the Outer Ring Road. Approval of three new bridges connecting ECR and OMR at Neelankarai, Palavakkam and Kottivakkam is expected to impact the capital values. Going forward growth in Chennai would not solely be determined by the IT/ITES sector, but also the transport corridors of the above mentioned infrastructure projects. Chennai market is looking forward to the MRTS and BRTS projects to give the city a new face in 2014-15. 2012 has seen the city shift investor focus from the usual OMR, ECR to the WEST and NORTH of Chennai. The operationalization of the TIDCO & Ascendas SEZ at Tiruvallur and the operationalization of the new airport at Sriperumpudur in 2015 is driving interest in the North & West Chennai regions. STOCK AND ABSORBTION Global uncertainties and IT/ITES sector going slow with their expansion plans impacted the real estate scenario in Chennai with high vacancy rate. Though the focus on residential sector from developers end was high, and Chennai market saw remarkably high number of new launches in 2012. Sales were moderate in comparison to the new residential supply added to the market. In 2013 Chennai residential market is likely to see few launches compared to 2012 but improvement in sales with an overhang of 18-22 months. Going forward growth in Chennai would not solely be determined by the IT/ITES sector, but also the transport corridors of inprogress projects
  • 2. Chennai Residential Market Zone Wise Distribution of Stock Source: IndiaProperty Chennai Under-Construction vs. Ready to Occupy Stock Source: IndiaProperty South Chennai Residential Market Absorption - Stock and Availability Source: IndiaProperty 1% 15% 68% 16% CENTRAL NORTH SOUTH WEST 0 5000 10000 15000 20000 CENTRAL NORTH SOUTH WEST Ready 2 Occupy Under Construction 0% 10% 20% 30% 40% 50% 60% 70% 0 2000 4000 6000 8000 10000 12000 Less than 30 Lacs 30 - 50 Lacs 50 - 75 Lacs 75 - 1 Cr Above 1 Cr No. of Total Units % of Available Units What we see is in South Chennai, across all budget ranges more than 50% units are available indicating piled inventory If the current sluggish growth of IT/ITeS sector continues South Chennai is expected to face an oversupply situation. Another area of concern is, lack of basic infrastructure
  • 3. The above graphs highlight the current residential market scenario of Chennai. With maximum new launches and construction happening around OMR and GST Road belt, South Chennai is seeing maximum growth. Concentrating on South Chennai, for all the budget ranges more than 50% units are available indicating piled inventory. If the current sluggish growth of IT/ITeS sector continues the area would face an oversupply situation. Moreover, lack of basic infrastructure (roads, water, and sewage system) would heighten it further. CAPITAL VALUES Residential Property Rates for Mid Segment Properties in Major Micro Markets in Chennai: MICRO MARKET CAPITAL VALUE (INR psft) Porur 4500 - 5000 Guduvanchery 3000 - 3200 Vandalur 3000 - 3300 Oragadam 2800 - 3500 Navalur 4500 - 5000 Medavakkam 4300 - 4500 Akkarai (ECR) INR 2 – 2.5 Cr (Only Villa Projects) On comparing the prevailing market rates in Chennai residential market to the property rates consumers are ready to pay; micro markets Medavakkam, Guduvanchery, Oragadam and Vandalur have comparable pricing. The increase in pricing of Porur and Navalur residential market over past four quarters has led to a demand and supply mismatch. What is typically seen is when prices increase in a certain market, it forces the mid income buyer segment to shift focus to lower priced micro markets. In 2013 we expect these markets to have stable pricing.
  • 4. Price Preference of Consumers for Various Micro Markets in Chennai – Overall Pricewise Source: IndiaProperty Chennai Popular Micro Markets Pricing Preference by Consumers – On Basis of Rate psft Source: IndiaProperty 0% 20% 40% 60% 80% 100% 120% Less than 30 30 - 50 Lacs 50 - 75 Lacs 75 - 1 Cr Above 1 Cr 0% 20% 40% 60% 80% 100% 120% Less than 2000 psft 2000 - 3000 psft 3000 - 4000 psft 4000 - 5000 psft Above 5000 psft Over the past four quarters Porur and Navalur have been hot markets and have seen an increase in pricing
  • 5. DEMAND FOR TOP LOCATIONS IN CHENNAI VELACHERY SHOLINGANALLUR MEDAVAKKKAM URAPAKKAM TAMBARAM PORUR AMBATTUR Chennai Demand for Popular Micro Markets over Last Three Quarters Source: IndiaProperty MARKET TRENDS The suburban micro markets of Porur, Poonamallee, Pallavaram, Chrompet and Tambaram which witnessed fresh launches in 2012 are expected to appreciate by 7 – 10 % in 2013. Other micro markets to look for are Ambattur, Avadi, Kolathur, Madipakkam, Medavakkam, Pallikaranai, Thiruporur, Urapakkam, Velachery. Q 3 (Oct – Dec 2012) - Chennai Micro Market Ranking for Consumer Demand Source: IndiaProperty 0% 1% 2% 3% 4% 5% 6% Porur Tambaram Medavakkam Ambattur Urapakkam Kolathur Chrompet Velachery Madipakkam Poonamallee Sholinganallur Kelambakkam Siruseri Iyyapanthangal
  • 6. Q 3 (Oct – Dec 2012) - Chennai Preference towards New and Resale Properties Source: IndiaProperty Time Frame in Which a Consumer Desires to Make Property Purchase Source: IndiaProperty 0% 10% 20% 30% 40% 50% 60% 70% 80% New New/Resale Resale 0 1000 2000 3000 4000 5000 6000 7000 8000 <2 Months <4 Months <6 Months >6 Months Qtr3 Qtr2 Qtr1 Preference trends for new and resale properties have beaten the conventional notion that consumers prefer only new houses – focus on budget Shift seen in consumers’ intent to make property purchase – wait and watch strategy
  • 7. Chennai Price Movement Consumer Budget Preference Source: IndiaProperty Focus of buyers in Chennai residential market over last three quarters has been on 2BHK properties with 35% consumer demand having a budget of INR 30 – 50 Lacs. This indicates need for more and more affordable and mid income residential properties in the city. Properties of Rs 1 Cr show only 10% demand. Q 3 (Oct – Dec 2012) - Chennai Unit Type Preference Source: IndiaProperty Investors go to areas which have potential end-user participation. Increase in number of buyers concentrating on mid segment residential properties, has led 0 1000 2000 3000 4000 Lessthan30 30-50Lacs 50-75Lacs 75-1Cr Above1Cr Lessthan30 30-50Lacs 50-75Lacs 75-1Cr Above1Cr Lessthan30 30-50Lacs 50-75Lacs 75-1Cr Above1Cr 1 BHK 2 BHK 3 BHK Qtr1 Qtr2 Qtr3 1 BHK 2 BHK 3 BHK 4 BHK 5 BHK Focus on 2BHK properties - 35% consumer demand seen within budget of 30 – 50 L Clear indication seen for affordable and mid income residential properties Shift in demand for 2BHKs with over 65% consumer demand
  • 8. to 2BHKs being the most preferred unit type in Chennai with over 65% demand over last three quarters of 2012. This trend is generally seen with most investors eyeing potential rental income from 2 BHK residential units which are easy to rent. CONCLUSION In 2013 Chennai real estate market is expected to see stable growth with moderate appreciation. The residential market is likely to see few launches with focus on reduction in the inventory overhang which currently lies between 6 – 8 quarters. With heightened Government’s focus on improving the infrastructure scenario, an increase in interest for commercial as well as residential properties is likely to be seen. With an eye towards potential rental income, preference for 2BHK units is more

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