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The demand for housing in Chennai is expected to be in the range of 30,000-35,000 units annually, driven mainly by IT and ITeS sector, banking, financial services and Insurance (BFSI) and manufacturing, which includes automobiles, according to a report by real estate PE firm ASK Property Investment Advisors.
Titled as 'The Chennai Residential Real Estate Report', it also said the housing loan market of Chennai was expected to be Rs 800-900 crore, calculated on a monthly basis.
"We expect the overall market to be stable with an upward bias in growth corridors in Chennai market. As of now, we don't see any price corrections in the market," said Sunil Rohokale, CEO and managing director, ASK Group.
The residential property prices range from Rs 15,000-20,000 per sft for city centric premium residents; Rs 4,500-5,500 per sft in emerging growth corridors for middle-income housing and Rs 2,800-3,500 per sft in extended suburbs for affordable housing, it said.
In the last three years, prices have generally appreciated in the range of 5-15 per cent annually.
Interestingly, Chennai accounts for a major share of $185 billion investments in the state, indicating a steady growth in jobs and rising need for houses, added the report. Apart from IT sector investments, manufacturing consisting of auto and auto-ancillary, textiles and leather industries also added a significant boost to the state's economic growth.
Unlike Mumbai and Bangalore, Chennai didn't see exodus of migrants as there are other cities in the state like Coimbatore or Madurai, which also offer enough job opportunities. The development of residential real estate, thus, is part of urbanisation and not migration of population into the city, the report said.
However, the study observed that new launches had come down considerably in 2012, compared to 2011, with a decline of 12 per cent in absorption rate, mainly due to the delay in approvals.
The new launches came down to 26,674 units in 2012, compared with 37,109 units in 2011 while the average absorption rate was down to 26 per cent from the 29 per cent in 2011. However, this would lead to a balanced demand-supply in 2013, it said.
