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INSITE REPORT

January - March 2018

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Methodology FOREW0RD The Insite Report by 99acres.com captures the quarterly capital trends and the annual rental analysis of residential apartments in key The first quarter of 2018 countersigned a revival in market real estate markets – Delhi sentiment and enquiries, amid a modest impact on overall sales NCR, Mumbai Metropolitan volume across metros. Supply in the ready residential segment Region (MMR), Bangalore, outstripped demand, particularly in case of luxury and ultra- Pune, Chennai, Hyderabad, luxury units. The under-construction market, too, narrated a Kolkata and Ahmedabad. In similar tale putting a downward pressure on average weighted order to assess the prevailing capital ‘asks’. With new launches down by around 40 percent, sentiment, the report delves YoY, any improvement in property prices is now dependent on the deep into demand and absorption of excess housing stock, which ranges between 15 and supply of properties across 48 months for different metros. Additionally, the increasing cost varied budget segments and of compliance resulting from stringent rules and adherences may occupancy stages. While push the real estate prices up, especially for new launches. Resale demand is a function of segment, however, may not witness any substantial change in ‘ask’ queries received, supply is rates due to the inherent competition characteristic to the segment. based on property listings posted on 99acres.com in On a micro-level, Hyderabad, Pune and Bangalore exhibited Jan-Mar 2018. resilience and showed signs of revival more prominently than other metros. Low inventory levels and fast-paced commercial expansion serve as demand and sales catalysts for these markets. Mumbai and Delhi NCR maintained status quo w.r.t. prices and sales velocity despite multiple infrastructural overhauls ranging Impact of Union Budget Demand-Supply Analysis from metro rail project to new airports and redevelopment drives. Contents 06 10 Any noteworthy improvement in the realty ambience of these Impact of Union Budget 2018-19 on the Demand-supply trends of residential cities now relies on an effective RERA implementation. Plausibly, Indian real estate market apartments in Jan-Mar 2018 RERA-compliant projects might command a premium over others because of the additional costs borne by the developers in the process. Marketers could employ buyers’ trust while Market Movers Annexures Foreword 03 07 11 deciding the price and sales strategy for RERA-approved projects. 99acres’ perspective on current market News that impacted Chennai’s sentiment realty market in Jan-Mar 2018 The raft of reforms and legislations passed in the last two years – Demonetisation, RERA and GST – have now started coxswaining the market into a consolidation mode. This could mean fewer National Outlook 04 Chennai at a Glance 08 new project launches across budget segments. The increasing preference for affordable homes, however, would drive realty Snapshot of real estate ambience across Capital price movement in key dynamics in the long haul. Apart from a healthy end-user demand, top 8 metro cities micro-markets of Chennai the Government’s thrust through incentives such as granting infrastructure status in Union Budget 2017-18 and the setting up of Market Indicators Chennai an affordable housing fund in this year’s Budget announcement will 05 09 ensure a rising appetite and supply for such projects across country. Changes in capital rates and inventory Key highlights - Chennai’s capital and status QoQ; and rental values YoY rental market in Jan-Mar 2018 99acres 99acres 4 INSITE : CHENNAI India’s No.1 Property Portal India’s No.1 Property Portal INSITE : CHENNAI 5

National Outlook Market Indicators

HOME BUYING SENTIMENT Capital Values Rental Values Supply With the industry getting accustomed to RERA and GST, market was seen regaining normalcy in the first quarter of 2018. Enquiries from fence-sitters resurfaced across metros with a reinstated interest in the under-construction category. Growing transparency and improved processes are expected to fuel BANGALORE this trend in the future.

DELHI NCR

PROPERTY PRICES MUMBAI Despite burgeoning enquires, piling inventory restricted price appreciation, particularly in Delhi NCR. Infrastructural overhauls, a few new launches and incremental ‘asks’ in the resale market, fuelled price growth in some micro- markets of Mumbai, Pune and Bangalore. Affordable pockets will monopolise CHENNAI end-user demand, keeping capital growth in check in the forthcoming quarters. PUNE

HYDERABAD RENTAL LANDSCAPE The obtuseness in the buying market has unabatedly benefitted the rental landscape over multiple quarters. Lease values burgeoned across metros, YoY. Affordable pockets and areas in proximity to transport corridors ruled the KOLKATA roost with maximum traction, pushing rental ‘asks’ further. Speculations of an improvement in the rental values in the ensuing quarters are rife. AHMEDABAD

* Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com

SUPPLY Stringent laws under RERA circumscribed new supply; however, progress on project registrations spiked under-construction inventory across cities. The resale market swarmed with properties across budget segments. RERA-approved supply in the affordable segment remained low this quarter. New launches are anticipated to resurface with increased compliance in the months to come. 99acres 99acres 6 INSITE : CHENNAI India’s No.1 Property Portal India’s No.1 Property Portal INSITE : CHENNAI 7

- IN F CUS Market Movers

BUDGET 2018-19 Sand paucity stalls realty projects Acute scarcity of river sand in has brought real estate activities to a The real estate sector expected Union Budget 2018-19 to address concerns pertaining to concessional GST standstill, delaying construction of ongoing projects across the State. While a few for housing sector, regularisation of stamp duty charges, and changes in income tax slabs. While these were left unanswered, a slew of announcements pertaining to ‘Housing for All’ counterbalanced the lack of attention small-scale developers have parked their projects, others have opted for substitutes to real estate expectations. such as gypsum and M-sand.

Centre approves Chennai-Salem green expressway INFRASTRUCTURE UPGRADES The Central Government announced a 274-km long green expressway corridor Focus on infrastructure development is anticipated to create new real estate pockets and boost housing between Salem and Chennai at an estimated cost of Rs 10,000 crore. The proposed demand with Funding worth Rs 5.97 lakh crore to infrastructure upgradation expressway will reduce travel time between two cities to three hours from the present A capex of Rs 5.35 lakh crore to Bharatmala project Phase I for strengthening road network six hours. Tenders will be floated in Q2 2018. National highway budgetary allocation of Rs 71,000 crore

State proposes Phase 2 of Tamil Nadu government proposed three metro rail corridors covering 107 km AFFORDABLE HOUSING FUND under Chennai Metro Phase 2. The first phase of the project will cover two routes Increased focus on the affordable segment is evident from the establishment of a dedicated affordable housing - to Chennai Mofussil Bus Terminus (15 km) and Madhavaram to fund worth Rs 60,000 crore under the National Housing Bank (NHB) (35 km). In another development, CMRL began trial run on an A target of 37 lakh homes in urban areas and 51 lakh homes in rural India in 2018-19 Access to cheaper and alternative funds to boost low-income housing underground 4-km stretch from to AG-DMS. Reduction of GST to an effective eight percent from earlier 12 percent on homes purchased and constructed under Credit linked subsidy scheme (CLSS) State allocates funds for Chennai Peripheral Road project State government sanctioned Rs 200 crore for the first phase of Chennai Peripheral Road, connecting Port with Thatchur. The 129-km long corridor is aimed at DISINVESTMENT decongesting northern section of the Chennai Industrial Corridor. A disinvestment target of Rs 80,000 crore for FY 2018-19 will open new pockets for private developers This will offer aid to private developers for buying landlocked parcels The move is expected to address the housing shortfall that India currently faces Tamil Nadu slum board plans 3,000 houses under PMAY Under PMAY, Tamil Nadu slum clearance board has proposed to develop 3,000 houses at Manali New Town to accommodate slum dwellers in . Till now, around 288 slum dwellers have already been allotted houses. 99acres 99acres 8 INSITE : CHENNAI India’s No.1 Property Portal India’s No.1 Property Portal INSITE : CHENNAI 9

CHENNAI Chennai at a Glance In line with the previous quarters, Jan-Mar 2018 remained testimony to fewer launches, truncated sales volume and negligible price movement. While developers continued to struggle with the ambiguous norms of the Real Estate Act, prospective buyers abstained from entering the market.

Price movement in key micro-markets Key Highlights Political instability and inefficient implementation of The industrial district, , witnessed property Average ‘Ask’ Rate QoQ YoY Locality RERA and the online property registration system, prices firming by two percent in the current (Per sq ft) Change Change continued to cast their shadows on Chennai’s realty quarter. Its comparative affordability to the 4,000 - 4,600 2% 1% market in Jan-Mar 2018. As a result, the city failed neighbouring Saidapet, Adyar and ensured to post any notable hike in average weighted capital buyer traction. Metro connectivity coupled with 4,800 - 5,900 -1% 3% ‘asks’ in the current quarter. the newly completed Kathipara flyover worked as a growth catalyst for the locality. 4,200 - 5,600 1% 1% Well-developed housing belts remained popular amongst buyers. While Adyar topped the capital in the West and in the South Ambattur 4,100 - 4,800 -4% -7% charts with a four percent jump in average property witnessed capital prices slipping by two to four prices, Medavakkam posted a two percent hike, QoQ. percent, QoQ. Stiff completion amongst multiple new Madipakkam 4,200 - 4,700 -2% -3% The localities are favoured owing to their proximity projects under different stages of completion led T Nagar 9,000 - 12,000 4% 5% to Old Mahabalipuram Road (OMR) and the IT hub, developers to revise ‘ask’ rates in order to lure buyers. Velachery, where prices have gone beyond affordable. 8,900 - 11,400 3% 5% The subdued capital market benefitted the rental The penchant for seamlessly connected areas was landscape where average prices bolstered by two 3,350 - 4,200 -1% 3% visible with in posting percent between Jan-Mar 2018 and Jan-Mar 2017. a three percent hike in capital prices, QoQ. Affordability remained a major attraction for the Velachery 5,100 - 7,100 1% -7% In addition to having a plush residential and price-conscious tenant community in Chennai. commercial inventory across budget segments, it is 15,000 - 18,000 3% -2% witnessing a comprehensive infrastructural expansion. Located along NH-4 and offering competitively- The development of Tambaram Railway Station as priced rental inventory, witnessed a leap * Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter a terminal, catering to the Southern Tamil Nadu of 10 percent in rents, YoY. , another pocket- bound trains, has helped its case. The factors also led friendly locale, recorded a similar rental hike on the the locality to register a five percent upward tick in back of smooth road and rail connectivity. rental prices, YoY. 99ACRES OUTLOOK

Chennai’s realty market remained stagnant with meek sales projects across the State have been successfully registered volume and nearly no new launches in the first quarter of under the Act. Top Performers - Capital Market Top Performers - Rental Market 2018. A slight increase in demand for under-construction properties hints towards a revival in the otherwise tepid The completion of long-awaited bridges at Porur and 10% investor sentiment. The commencement of the AG-DMS- Thirumangalam have spread some cheer in the market. The 4 10 3% Saidapet metro corridor is expected to boost traction in the enhancement has majorly benefitted the secondary market 8 2% adjoining localities of Anna Nagar, , Ashok Nagar with these locations already witnessing improved demand 2 from end-users. and , as the stretch would ease commuting 1% 6% 6 between Washermenpet and the Chennai airport. -2% -4% 5% The forthcoming quarters are speculated to reap the 0 4% 4 % Change The slow registration process of residential projects under benefits of the proposed infrastructural enhancements. % Change Sales volume, however, is expected to maintain Tamil Nadu Real Estate (Regulation and Development) Act -2 2 (TNRERA) and inefficient online property approval system status quo due to a handful of new launches. The number could improve, provided the existing leakages in TNRERA are proving to be hindrances to the smooth functioning 0% are plugged. -4 0 of real estate activities State-wide. Till now, only 380 Tambaram Medavakkam Porur Madipakkam Ambattur Porur Velachery Tambaram Perambur Medavakkam

Locality Locality

* %change represents quarterly capital movement * %change represents yearly rental movement 99acres 99acres 10 INSITE : CHENNAI India’s No.1 Property Portal India’s No.1 Property Portal INSITE : CHENNAI 11

DEMAND-SUPPLY ANALYSIS After several quarters of subdued demand for under-construction units, the category regained buyer interest, albeit by a small Annexures margin, in the quarter ending March 2018. The minimal upward movement indicates homebuyers’ improving confidence in the segment, partially driven by the formation of TNRERA. New supply remained constricted across Chennai. CAPITAL VALUES CAPITAL VALUES

Key Trends Locality Jan-Mar 2018 Locality Jan-Mar 2018

While demand for under-construction units witnessed Adyar 12900 Urapakkam 3750 a marginal hike in the current quarter against Ambattur 4890 9050 Oct-Dec 2017; supply inched by three percent, Anna Nagar 11000 Velachery 7120 as owners made attempts to disinvest their 4690 realty investments. Distribution of Residential Apartments 4200 The affordable and mid-income housing segments RENTAL VALUES UC RTM Demand UC RTM Supply (within Rs 40 lakh) remained the most popular 3870 amongst buyers. The budget category accounted 50 Guindy 7900 Adyar 26 for more than half of the overall housing demand 47% 48% 3748 Ambattur 13 in the city. However, supply remained lower this quarter, too. 40 8550 19 37% 36% Kolathur 5310 Chromepet 12 The demand-supply gap in the under Rs 25 lakh housing segment slumped by two percent, standing at 30 4110 Guduvancheri 10 12 percent in Jan-Mar 2018. The gap has condensed Madhavaram 4788 Kelambakkam 11 by three percent, YoY. 20 Madipakkam 4980 17 Supply of units priced between Rs 40 lakh and Medavakkam 4652 Madipakkam 12 Rs 60 lakh surpassed demand by three percent. 10 Mogappair West 5870 Medavakkam 12 Surplus inventory in the most popular budget bracket relays negotiation power in the hands of the buyer. 16790 Mylapore 27 0 Jan-Mar Oct-Dec Nungambakkam 18220 Nungambakkam 22 The high-income segment (Rs 60 lakh – Rs 1 crore) 2018 2017 saw supply exceeding demand by 12 percent, QoQ. Oragadam 3605 Oragadam 11 Graph depicts the availability of residential apartments wrt Ultra-luxury housing category (above Rs 2 crore) other property types, QoQ, along with the distribution of 5560 13 witnessed a borderline disequilibrium in demand- under-construction and ready stock Pallikaranai 4980 Perambur 14 supply this quarter. Perambur 5880 13 Perumbakkam 4345 19 Perungudi 6780 Porur 17 Poonamallee 4010 RA Puram 29 Demand Supply Porur 5580 Saidapet 19

40 RA Puram 17500 Sholinganallur 16 8830 11

30 -2% 4850 T Nagar 23 -2% -3% 3% 3% 4% -12% -14% -15% Sholinganallur 5390 Tambaram 11 20 12% 13% 13% -1% 1% 0% Siruseri 4210 20 3850 Thoraipakkam 18 10 T Nagar 11300 Urapakkam 11 Tambaram 4600 Vadapalani 20 0 Jan-Mar Oct-Dec Jan-Mar Jan-Mar Oct-Dec Jan-Mar Jan-Mar Oct-Dec Jan-Mar Jan-Mar Oct-Dec Jan-Mar Jan-Mar Oct-Dec Jan-Mar Thiruvanmiyur 10910 Vandalur 10 2018 2017 2017 2018 2017 2017 2018 2017 2017 2018 2017 2017 2018 2017 2017

Within Rs 25 Lakh Rs 25-40 Lakh Rs 40-60 Lakh Rs 60 Lakh - Rs 1 Crore Rs 1 Crore and Above Thoraipakkam 6320 Velachery 18

Graph depicts the fluctuation in supply wrt demand for residential properties in various budget categories *All prices are per sq ft rates *Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter FIND BEST OTIONS TO BUY SELL RENT PROPERTY

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