Real Estate

Chennai housing supply surges 73% in 2012

Our Chennai Bureau | Updated on April 12, 2013

An apartment block in Chennai

Despite subdued economic conditions, Chennai witnessed several new project launches in 2012 totalling a supply of over 26,000 houses, according to Knight Frank, property consultants.

The supply last year was 73 per cent more than in the previous year reflecting improved economic conditions and the optimism in the Chennai residential market.

As on December 2012, an estimated 77,500 units were under construction in the city.

A majority, about 60 per cent of the launches in the last two years, were concentrated in the southern part of the city. South Chennai, along the OMR and GST Road (NH45) is rapidly developing as a self-sustaining hub with the presence of a large number of IT SEZs, IT Parks and manufacturing units.

Nodes such as Perungudi, Sholinganallur and Siruseri on the OMR, along with Tambaram and Mahindra World City on GST Road, have created enormous employment opportunities in this region. This has inherently led to the development of the residential market in South Chennai.

The southern market is followed by West Chennai, which witnessed the launch of second-highest number of new residential units during 2012, accounting for one-third of the total launches. Unlike South Chennai, the western region is dominated by the manufacturing sector rather than the IT/ITeS sector, barring the DLF IT SEZ in Manapakkam.

The market will benefit from the large number of manufacturing units along the Sriperumbudur-Oragadam industrial corridor. Oragadam has gained prominence lately for residential development due to its strategic location.

The northern part accounted for seven per cent of the total units launched during 2012. The general perception regarding North Chennai as a logistics hub is gradually ebbing away owing to recent infrastructural developments and the launch of key residential projects by prominent developers. Locations such as Tondiarpet, Madhavaram and Perambur are increasingly becoming preferred residential destinations. A number of residential projects are underway in these regions. Although the demand for housing is primarily driven by the business community, traders and public sector employees, of late, these locations are also being preferred by investors who are unable to afford a house at the heart of the city.

Few launches in centre

The central part of Chennai, expectedly, accounted for a minimal percentage of the total number of new launches in the city during 2012. In the previous year, the region had contributed towards eight per cent of the new launches. This can be attributed to the dearth of suitable plots for development. Thus, while Central Chennai is one of the most sought after residential destinations in the city, demand for residential units has always far exceeded the number of units under construction.

While the market in 2011 could not maintain the enthusiasm shown in the early part of the year owing to the impending uncertainty in the global economy, it managed to sustain a consistent momentum through 2012.

Absorption

Chennai residential market witnessed a steady absorption in both 2011 and 2012. While 2011 saw an absorption of around 27,500, it improved to approximately 29,000 units in 2012. However, the surge in new launches in 2012 led the proportion of unsold under-construction units to increase alarmingly and hover around the 40 per cent mark, up from its previous level of 31 per cent in 2011. In many cases, developers resorted to giving away freebies and came up with various schemes to attract buyers during the festive season in 2012.

Published on April 12, 2013

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like