CHENNAI 2018 April - June

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CHENNAI 2018 April - June www.99acres.com INSITE REPORT CHENNAI 2018 April - June 99acres India’s No.1 Property Portal 99acres India’s No.1 Property Portal INSITE : CHENNAI 3 CBO’s Desk The positive impact of groundbreaking policy reforms - Real Estate (Regulation and Development) Act and Goods and Services Tax (GST) – is seeming to bear some fruit in FY 2018- Contents 2019. Marked by a gradual reduction in unsold inventory, a rise in enquiries in affordable housing segment and the return of new launches, the beginning of the fiscal year is hinting From CBO’s Desk Maneesh Upadhyaya Chief Business Officer towards a slow but steady revival. 03 CBO’s perspective on current market 99acres.com The quarter recorded a quantum jump of almost 50 per cent in new residential launches to reach 50,100 units. Affordable National Outlook housing led the supply graph, up by about 100 per cent, QoQ, in 04 Snapshot of real estate ambience Pune, Hyderabad, Delhi NCR, Chennai, Mumbai Metropolitan across top 8 metro cities Region, Bangalore and Kolkata. Inventory levels, on the other hand, dropped by 10-30 per cent, YoY, across metros. RERA- Market Indicators approved projects commanded a significant share of the 05 Changes in capital rates and inventory residential demand, evident from a healthy upswing status QoQ; and rental values YoY in the timeshare on RERA-registered projects on 99acres.com. Realty stakeholders are gung-ho Market Movers about the upcoming festive quarter, which News that impacted Chennai’s might see a resurgence in end-user 06 realty market in Apr-Jun 2018 demand and sales volume. 99acres Outlook Methodology 07 99acres’ perspective on current market The Insite Report by 99acres.com captures the quarterly capital trends and the annual Chennai rental analysis of residential apartments 08 Key highlights - Chennai’s capital and in key real estate markets – Delhi NCR, Mumbai rental market in Apr-Jun 2018 Metropolitan Region (MMR), Bangalore, Pune, Chennai, Hyderabad, Kolkata and Annexures Ahmedabad. In order to assess the prevailing sentiment, the report delves deep into demand 10 and supply of properties across varied budget segments and occupancy stages. While demand is a function of queries received, supply is based on property listings posted on 99acres.com in Apr-Jun 2018. 99acres India’s No.1 Property Portal INSITE : CHENNAI 5 MARKET INDICATORS Capital Values Rental Values Supply Bangalore ˄ ˄ ˅ Delhi NCR ˄ Mumbai ˄ ˄ ˅ Chennai ˄ ˅ Pune ˄ ˅ Hyderabad ˄ ˄ ˅ Kolkata ˄ Ahmedabad ˄ ˄ ˄ * Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com NATIONAL OUTLOOK HOME BUYING SENTIMENT IN FOCUS The realty landscape witnessed a fleeting calm even as enquiries and sales recorded a slight uptick in most metro cities this quarter. While the RERA ANNIVERSARY non-formation of a RERA-body marred buyer sentiment in Kolkata and Hyderabad, the approaching ‘Aadi’ period slackened growth in Bangalore and May 1, 2018 marked the first anniversary of the Real Estate (Regulation and Development) Act, 2016 Chennai. A revival in property sales is expected in the festive quarter. [RERA]. The implementation progress varied from State to State depending on timely compliance with Central RERA rules. Kerala, West Bengal and the six north-eastern States are yet to implement the Act. Others including Karnataka, the NCT of Delhi and Tamil Nadu made snail-paced progress, tarnishing PROPERTY PRICES consumer sentiment. Price movement remained marginal across cities, except Hyderabad, which saw notable growth due to infrastructural overhaul and robust office-space absorption. The premium segment remained passive as affordable housing GENERAL BUYING SENTIMENT grabbed a majority share of buyer demand. Any significant deviation in Buyer confidence ameliorated for RERA-approved projects. A resurgence of fence-sitters in select pockets, average weighted capital ‘asks’ is likely to happen around Oct-Dec 2018. driven by connectivity and job opportunities, was a testimony to the reviving market. Conversion rate improved, albeit minimal. The affordable housing sector garnered maximum buyer interest, however, RERA registration alone did not suffice to drive buyers towards under-construction properties. RENTAL LANDSCAPE The rental landscape continued to remain upbeat for the seventh consecutive quarter. Rental values witnessed a notable hike across cities, PROPERTY PRICES except Delhi NCR and Pune where a pile-up of ready inventory inflicted the Enquiries resurfaced and led several housing pockets register an uptick in property prices. While market. The growth is likely to continue for a few more quarters, until home Hyderabad reported a notable rise in residential property rates, Pune and Chennai maintained status quo. buying picks up pace and sees a complete revival. Delhi NCR and Mumbai reported a price correction in the last one year due to discounts offered by developers to lure buyers back into the market. SUPPLY The hiatus in new launches amidst piling residential stock helped cities such as NEW LAUNCHES Bangalore, Mumbai, Pune, Chennai and Hyderabad rationalise inventory levels. New launches nose-dived across cities due to increased compliance under RERA. Chennai, Hyderabad and Slow-paced registrations under RERA played a key role in curtailing the saleable Kolkata reported a 50-70 percent dip in launches, YoY, largely owing to delayed notification of RERA rules. primary stock. The trend is expected to continue as no exceptional measures Delhi NCR, Mumbai, Bangalore and Pune, too, witnessed new launches coming to halt. A year later, the are being observed to fast-track RERA registrations. markets seem to have gained ground with new launches reporting an improvement, QoQ. 99acres India’s No.1 Property Portal INSITE : CHENNAI 7 99ACRES OUTLOOK Market Movers Chennai’s residential property industry was in tatters in 2017 after the investors abandoned the market post a series of events impacting the political, geographical TNRERA takes steps to upsurge Metro connectivity expands up till and regulatory framework of the city. Several quarters later, despite a spate of policy reforms and structural changes, residential sales and new project launches remain transparency Central Railway meek. Unsold inventory stood at 42,500 units at the beginning of Apr-Jun 2018, with The Tamil Nadu RERA (TNRERA) mandated After a delay of two years, two metro lines ready-to-move-in properties occupying a 20 percent share. developers with projects outside the ambit – Central to Shenoy Nagar and AG-DMS of RERA to mention the same in their to Little Mount via Saidapet – opened for Property prices, however, have managed to maintain status quo, QoQ, beckoning the advertisements. The measure was taken to public in May 2018, significantly reducing resiliency prevalent in the market. The rental graph, on the other hand, reported a hike improve transparency in the functioning of the travel time to the Central railway station. of four percent, YoY. the real estate sector since several developers Airport connectivity, too, bolstered with the were found advertising projects without RERA commencement of these metro routes. The expansion of the metro corridor towards the central parts of the city improved the registration number and website address. livability quotient and rendered positivity to the otherwise grim consumer sentiment. Railway line in North Chennai nears However, any significant impact of this development on property sales and enquiries Sand paucity woes disrupt construction completion is yet to be seen. The lull in the market is expected to spill over to the upcoming activities The fourth railway line between Korukkupet months of July and August, the inauspicious monsoon period called ‘Aadi’. Experts The State government has been mulling and Thiruvottriyur is nearing completion foresee an improvement in Chennai’s residential market only after August, especially import of river sand to meet the requirements and is anticipated to reduce the travel time when the festive season rains discounts and freebies. of the construction industry. However, after of express and suburban trains between rejecting sand from Assam, the State finalised Chennai and Gummidipundi. This The booming logistics sector and the massive fund flow in the IT sector hold the an overseas contractor to import five lakh tons 5 km-long stretch is a part of the baton to a revival in Chennai’s residential market in the ensuing quarters. The sand of river sand every month. The added cost 4th lane between Chennai Beach crisis may, however, pose a hurdle to the growth of the sector. is anticipated to shoot property prices up in and Athipattu, one of the the State. busiest routes of the Southern Railways. State puts Tenancy Act on hold Awaiting the Centre’s modified Act, Tamil Nadu Price Movement in Key Micro-markets government has put its ambitious Tenancy Act on hold. The implementation of this Act was LOCALITY AVERAGE ‘ASK’ RATE (PER SQ FT) QOQ CHANGE YOY CHANGE anticipated to bring a paradigm change in the Medavakkam 3,900 - 4,800 2% 2% rental market by counter-balancing the rights of landlords and tenants. Perambur 4,800 - 6,100 3% 4% Porur 4,400 - 6100 -1% 0% Avadi 3,200 - 3,900 -2% 5% Ambattur 3,700 - 4,900 0% 7% Madipakkam 4,200 - 5,100 0% -4% Anna Nagar 8,300 - 10,800 -2% 4% Velachery 4,900 - 7,300 2% 4% Poonamallee 3,700 - 4,200 2% 5% T Nagar 9,000 - 11,000 -4% 0% * Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter 99acres India’s No.1 Property Portal INSITE : CHENNAI 9 CHENNAI Infrastructure overhaul seems to KEY HIGHLIGHTS SUPPLY OF APARTMENTS be the only growth catalyst in the The look-out for affordable homes continued to drive buyers city marred by slow-paced registrations The average weighted property prices across Chennai witnessed UC RTM DEMAND UC RTM SUPPLY under Tamil Nadu RERA (TNRERA), zonal variations, with the city average remaining unchanged this towards the South along the Grand Southern Trunk (GST) Road and ambiguities pertaining to GST, coupled quarter.
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