Average property rates in Chennai remained unchanged in April-June 2020 over the previous quarter. However, the rental graph showed a marginal 1% hike in average ‘asking price’, YoY, according to Insite – a quarterly real estate report by property portal 99acres.com.
In terms of housing demand, over 60% of the total demand was reported for residential properties priced below Rs 40 lakh. Areas such as Navalur, Siruseri, and Perumbakkam attracted most enquiries. April-June 2020 witnessed an increased affinity of serious homebuyers for projects nearing completion.
While the nationwide lockdown halted a majority of construction activities in the city, the non-availability of migrant labourers in the city impacted the overall construction cycle in the studied period. Resultantly, several new projects that were planned to be launched in the quarter have been shelved indefinitely due to shortage of construction workers, liquidity constraints and withdrawal of home buyers from the market. In Chennai alone, over 24,000 units were scheduled to be completed by the end of 2020. And, with the extension of the lockdown period till July end, the real estate activities in Chennai are expected to experience a longer wait.
Removal of stamp duty and registration charges on the new and completed flats is expected to revive the buyer sentiment. Several major infrastructure projects such as Chennai Metro Phase 2, Metrolite, a 110 km mega streets project, along with commercial expansion, have the potential to lift the residential real estate market in the ensuing quarters, the report says.
Commenting on the report, Maneesh Upadhyaya, Chief Business Officer, 99acres.com, said, “Apr-Jun 2020 witnessed several developers undergoing digital transformation and virtual project launches and e-site visits providing some relief from the COVID-19-induced crisis. After some setbacks, 99acres traffic and responses returned to pre-COVID levels by the end of June 2020. A survey by 99acres revealed that 75% of its registered buyers now prefer shortlisting or buying a property through real estate portals. Further, 60% of the participants averred that they would prefer undertaking a virtual tour before physically visiting the project site.”
Localities with good social infrastructure and connectivity in the northern and southern belts remained popular among the tenant community. The highest demand-supply mismatch was reported for properties under Rs 40 lakh. Under this bracket, housing demand surpassed supply by over 20%. On the other hand, properties priced between Rs 40-60 lakh showed minimum disequilibrium. Two-bedroom units remained popular among buyers’ community in this quarter, too.
Localities such as Sholinganallur, Thoraipakkam, and Tambaram remained popular on the back of ample housing inventory priced within Rs 50 lakh and connectivity to National Highway 4 and 5. Kelambakkam witnessed a sharp rise of 9% in rentals, YoY, owing to its proximity to Siruseri IT Park, and road connectivity to all parts of the city. Localities such as Pallavaram, Egmore and Porur remained popular among the tenant community, reporting an average rental hike of 7%, each, YoY.