www.99acres.com CHENNAI RESIDENTIAL MARKET UPDATE JULY-SEPTEMBER 2019 Market Sentiment INSITE 99acres India’s No.1 Property Portal FROM CBO’S DESK With the news of an impending provide financing to the many stalled economic slowdown clouding the affordable and mid-income housing market, end-user and investor activity projects in the country cheered plunged evidently in residential real the market. The Government will estate in Jul-Sep 2019. This clubbed contribute Rs 10,000 crore, which with multiple insolvency proceedings is anticipated to benefit around and the on-going financial crunch that 350,000 housing units. Further, most developers are struggling with consecutive repo rate cuts and the kept overall sentiment submissive. mandate around repo rate linked Average weighted prices of residential home loans are seen as housing apartments witnessed meager demand lifters. The impact of alterations quarter on quarter, barring these policy announcements will Hyderabad and Ahmedabad. Rentals, be more evident in the ensuing too, grew insignificantly in the last one festive quarters. year. An inventory overhang of 10 lakh units along with 5.6 lakh delayed homes across the country kept price points under check. On the supply front, the top eight metros saw the launch of around 486 housing projects in Jul-Sep 2019, about 30 percent down from Apr-Jun 2019. While the quarter did not have many laurels to talk about, the Finance Maneesh Upadhyaya Minister’s announcement regarding Chief Business Officer the creation of a special fund to 99acres.com NATIONAL MARKET OUTLOOK INDICATORS Capital Values Rental Values Supply HOME BUYING SENTIMENT Home buying sentiment remained weak due to developer defaults and the NBFC crisis, which dried up funding and slowed the completion of already delayed projects. Around 5.6 lakh residential projects are reportedly stalled across the country. Developers, nevertheless, anticipate the festive DELHI NCR season to lift housing demand up. PROPERTY PRICES Metro cities witnessed marginal upticks in property prices. KOLKATA Hyderabad and Ahmedabad took lead with a two percent AHMEDABAD surge, QoQ. A few good deals in certain popular housing hubs contributed to the said price hike. The industry does not foresee any major deviations in the prices of new or MUMBAI ready residential stock in the ensuing quarters, too. PUNE HYDERABAD RENTAL LANDSCAPE Rental ‘asks’ grew by an average of 2-3 percent across metros, YoY. The segment is expected to benefit from the prolonged caution exercised by homebuyers. Rental hubs along transit corridors are expected to see better demand and surging ‘rates’ in the next couple of quarters. Co-living is fast emerging BANGALORE CHENNAI as a trend, especially in Bangalore, Hyderabad and Mumbai. SUPPLY Metro cities witnessed the launch of around 486 projects in Jul-Sep 2019, a 33 percent dip versus Apr-Jun 2019. Economic slowdown and liquidity crunch forced builders to hold back new launches. Government’s efforts to boost the Public Sector 99acres Banks and NBFCs by injecting funds worth Rs 1 lakh crore may India’s No.1 Property Portal propel housing supply in the forthcoming quarters. * Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com CHENNAI’S REALTY AT A GLANCE Property Rental Prices ‘Asks’ Price movement in key micro-markets Localities Jul-Sep 2019 QoQ % Change YoY % Change Medavakkam 4,080 - 4,760 0% 0% Demand Supply Porur 4,980 - 5,890 0% -5% Perambur 5,280 - 6,500 0% 2% Madipakkam 4,920 - 5,930 3% 3% T Nagar 10,120-12,750 4% 10% Velachery 6,100 - 7,460 1% 2% * Property prices represent quarterly change * Rental ‘asks’ represent yearly change * Supply is basis properties listed on 99acres.com * Demand is basis queries received on 99acres.com Adyar 11,640 - 14,830 1% 0% Nungambakkam 13,280-16,460 2% -3% Anna Nagar 8,580 - 11,220 1% -3% Ambattur 4,480 - 5,390 -4% 1% * Average ‘ask’ rates have been calculated as per listings posted on 99acres.com INSITE : Chennai 7 99acres DEMAND & SUPPLY India’s No.1 Property Portal DYNAMICS Affordable 55% 40% Housing 99ACRES’ OUTLOOK Chennai’s real estate market remained under pressure with plummeting sales volume and a limited number of new launches. The city closed the quarter with the sale of 2,620 housing apartments and the addition of 48 new 26% residential projects, amounting to just 10 percent of the total new launches across the top eight metros. Not surprisingly, the city witnessed a two percent Mid-income drop in property registrations in the last one year. Housing Kancheepuram and Tiruvallur districts accounted for 45 percent of the total property transactions, owing to their proximity to the IT hubs. South Chennai remained the most active rental market 39% with areas such as Medavakkam and Sholinganallur emerging as the front runners. Popular localities such as Pallavaram, Kodambakkam, Perambur, and Porur, too, witnessed an appreciation of 7-9 percent, each, YoY. 19% While weak home buying demand and subdued sentiment cloud the market this quarter, infrastructure and policy reforms by the State government may work as Chennai’s realty lifelines. The plan to develop Luxury a multi-deck elevated transport corridor along the Housing Old Mahabalipuram Road (OMR) is anticipated to 21% strengthen housing demand in areas such as Siruseri, Perungudi, Thoraipakkam, and Sholinganallur. Further, the development of a Financial City in Sholinganallur is expected to generate more employment in the region, which will eventually lift the residential market, too. Demand Supply * Graph depicts demand and supply of residential inventory across budget segments in the studied quarter INSITE : Chennai 9 INSITE : Chennai 9 KEY HIGHLIGHTS With as many as 8,131 delayed housing units worth Rs 4,474 crore, Chennai’s real estate remained in doldrums. Average weighted prices of residential apartments have been stagnant for many quarters now despite the addition of 2,000 new housing units in Jul-Sep 2019 alone. While residential demand from domestic buyers remained CAPITAL & low, Chennai continued to attract investors from across the globe on the back of competitive realty rates compared to other Southern cities - Bangalore and Hyderabad. RENTAL Affordable housing continued ruling the roost with nearly 9% 55 percent of the buyers preferring flats priced under Rs 40 lakh. As a result, demand outweighed supply in the 8% 8% category by 15 percent. Areas such as Perungudi, Thalambur and Perumbakkam, which offer a short commute to job hubs and an upmarket 6% lifestyle at an affordable price tag, attracted most buyers. The average property prices in Perungudi are around 5% Rs 7,000 per sq ft, almost half the rates in Adyar, and significantly lower than in Thiruvanmiyur, where property 4% 4% 4% 4% 4% rates are around Rs 11,100 per sq ft. Perumbakkam, another affordable housing micro-market located close to Shollinganallur ELCOT SEZ, also magnetised buyers. Property prices here range between Rs 3,700 and Rs 5,100 per sq ft. Porur, Iyappanthangal and 1% Thoraipakkam Gerugambakkam also emerged as some prominent micro-markets offering ample housing options. Demand 0% 0% Perumbakkam Ambattur 0% Guduvancheri Iyyappanthangal for compact 2 BHK units remained high in these areas. Medavakkam Porur Sholinganallur Velachery Pallavaram Popularly known as employment hubs, Perungalathur, -1% -1% Maraimalai Nagar and Mahindra World City garnered Capital healthy traction from office-goers. -2% Rental -3% -3% -4% * %change represents quarterly capital movement and yearly rental movement INSITE : Chennai 11 99acres India’s No.1 Property Portal CONCLUDING 3% REMARKS KOLKATA 4% DELHI NCR Chennai witnessed the launch of around 48 new housing projects in Jul-Sep 2019 against 33 in the previous quarter. AHMEDABAD Despite this, price points did not alter due to subdued 8% demand from buyers and growth inhibitors such as political turmoil, sand paucity, regulatory reforms and the catastrophic droughts. The city needs government’s push to fast track 37% infrastructure development around the city including 10% Chennai-Kanyakumari industrial corridor and Chennai- MUMBAI CHENNAI Bengaluru industrial corridor-Ponneri node; and the multi- deck elevated transport corridor. 11% HYDERABAD 12% 15% PUNE BUDGET-WISE BANGALORE DEMAND & SUPPLY The data depicts share of new launches across metro cities in the studied quarter 17% 16% 37% 36% 26% 29% 24% 39% 40% 43% 46% 49% 55% 53% 56% 37% 31% 50% Affordable Housing 30% 75% 31% 39% 53% 41% Mid-income Housing 39% 35% 36% 39% Luxury Housing 26% 29% 33% 46% 45% 33% 30% 30% 18% -5% 24% 34% 22% 21% 19% 21% 14% 15% 15% 15% 7% -6% Demand Supply Demand Supply Demand Supply Demand Supply Demand Supply Demand Supply Demand Supply Demand Supply DELHI NCR MUMBAI BANGALORE PUNE CHENNAI HYDERABAD AHMEDABAD KOLKATA INSITE : Chennai 13 * Graph depicts demand and supply of residential inventory across budget segments in top eight metro cities in the studied quarter INSITE : Chennai 13 METHODOLOGY ANNEXURES The Insite Report by 99acres.com captures the quarterly capital trends and the annual rental analysis of residential apartments in key real estate markets – Delhi NCR, Mumbai Metropolitan Region (MMR), Bangalore, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad. In order to assess the prevailing sentiment, the CAPITAL VALUES RENTAL VALUES report delves deep into demand and supply of properties across Locality Jul-Sep 2019 Locality Jul-Sep 2019 Locality Jul-Sep 2019 varied budget segments and occupancy