New housing development drives Chennai’s realty scene in Q1 of 2022

CHENNAI: As many as 5,000 residential units were sold in the first quarter of this year, with absorption outpacing the new launch figures in Chennai in the quarter. Most of the residential sales took place in south Chennai, followed by west Chennai. Interestingly, the IT and ITES, besides financial services businesses drove the realty buying sentiment owing to these sectors employment generating capacity.

The first quarter of this year saw a significant rise in the new residential supply, seeing 83% growth against the previous quarter. Here is a snapshot capturing some key data points of the realtyscape of the city

With nearly 3,100 new residential launches, Chennai recorded a significant growth of 83 per cent compared to the previous quarter of Q4 2021. The city contributed approximately three per cent of the total new launches across the top seven cities in India

The presence of IT/ITeS sectors along the Rajiv Gandhi IT Corridor has been influencing the residential market and resulted in the launch of more than 50 per cent of the residential units in South Chennai. West Chennai and East Chennai, together contributed 47 per cent of the city’s new launches

The lowest new residential activity was noticed in Central Chennai accounting for < one per cent of the city’s new launches

In terms of the ticket-size split, developers started to focus on the mid-end housing segment, contributing 63 per cent of the new launch supply. High-segment launches stood second, accounting for 19 per cent, followed by 15 per cent in the affordable price bracket

With the sale of nearly 5,000 residential units in Q1 2022, absorption outpaced the new launch numbers in Chennai in the quarter. The city demonstrated six per cent Q-o-Q sales growth and a 75 per cent y-o-y rise compared to Q1 2021

The majority of the residential sales were concentrated in South Chennai (72 per cent home sales) and West Chennai (23 per cent home sales). Maximum residential developments and sales of the city are witnessed here owing to the presence of employment-generation clusters hosting various IT/ITeS and financial services

North Chennai sold approx. four per cent units while the Central zone sold one per cent of housing units

With the city’s new launches kept in check, the available inventory in Chennai has come down from 34,300 units in Q4 2021 to 32,400 units in Q1 2022, depicting a quarterly dip of six per cent. As compared to the same quarter preceding year, the available stock in Chennai saw a dip of 11 per cent

Attributing to the mounting launches in the South and West Chennai, the majority of the available inventory is concentrated in these two zones, contributing 62 per cent and 29 per cent units respectively

Nearly 3/4th of the inventory is available in the price bracket Rs 40 lakh-Rs 1.5 crores, with mid-segment homes holding the highest share (42 per cent). The inventory overhang of Chennai has dropped by seven months compared to the previous quarter, from 33 months in Q4 2021 to 26 months in the current quarter.

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