The real estate scene in Chennai is a testament to the city’s development and change. It mirrors the blend of traditional and contemporary dreams, providing various property options catering to diverse lifestyles. Chennai’s status as a key IT and industrial centre, offering abundant job opportunities, has fuelled a growing demand for housing from both locals and newcomers to the city. Additionally, governmental initiatives to bolster the real estate sector have positively impacted the growth of the housing market. As Chennai’s economy progresses and its population becomes more diverse, its residential real estate market adapts accordingly.
A Brief Overview of The Previous Year
In 2023, Ahmedabad’s residential market experienced a remarkable growth in new supply, marking a substantial 74 percent increase compared to the previous year. This uptick translated into the launch of 16,153 units, indicating a growing confidence among developers in the market’s potential.
Among the various localities in Ahmedabad, Pallikaranai, Manapakkam, and Sholinganallur emerged as hotspots for new property launches in 2023. Despite broader economic fluctuations, residential sales in Ahmedabad showed resilience, recording a modest 5 percent year-on-year growth in 2023. Notably, certain localities such as Pallikaranai, Medavakkam, Sholinganallur, Perumbakkam, and Mogappair stood out for their robust sales performance, underlining their appeal to homebuyers.
In terms of price segmentation, the mid-range segment, particularly properties priced between INR 45-75 lakh, dominated the sales landscape, capturing a significant 35 percent share of the overall market. The luxury segment, comprising properties priced above INR 1 crore, continued to command a notable share of 23 percent, indicating sustained demand from affluent buyers. Additionally, 2BHK units were the most sought-after in Chennai residential market in 2023, constituting nearly half of the total units sold, at 49 percent. Following closely behind were 3BHK units, which accounted for 35 percent of the sales volume, reflecting the preferences of buyers for spacious living arrangements.
Positive Demand Trends in Q1 2024
In the residential sales data for Chennai, the first quarter of 2024 witnessed a positive trend compared to both the same quarter of the previous year (Q1 2023) and the preceding quarter (Q4 2023). When compared to Q1 2023, there was a notable year-on-year growth of 22% in Q1 2024, indicating a strengthening demand for housing in Chennai.
Chart showing sales trend in Chennai (Q1 2023 to Q1 2024)
This growth is largely driven by factors such as economic stability, population growth, and favourable market conditions. Moreover, in comparison to the immediate previous quarter (Q4 2023), there was a modest quarter-on-quarter growth of 3%. While this growth rate is relatively lower than the year-on-year increase, it still signifies a continued positive momentum in residential sales, suggesting sustained activity in the market.
Strong QoQ Growth in New Supply
The first quarter of 2024 saw mixed trends in Chennai’s new supply of residential units, compared to both Q1 2023 and Q4 2023. When examining year-on-year data, there was a slight decline of 2% in new supply compared to Q1 2023. This marginal reduction notwithstanding, the market remained relatively stable, signifying sustained activity in the real estate sector.
On the other hand, in comparison to the previous quarter (Q4 2023), there was a notable quarter-on-quarter growth of 58% in new supply during Q1 2024, indicating a significant increase in the number of residential units launched within a short span, reflecting heightened developer activity or strategic market movements.
Summing Up
Ahmedabad’s residential real estate market experienced significant growth in 2023, with a remarkable surge in new supply reflecting developers’ increased confidence. Moving into the new year, Chennai’s residential market displayed positive demand trends in Q1 2024. While new supply remained relatively stable with a nominal year-on-year decline, a notable quarter-on-quarter growth indicate increased developer activity. Given these positive trends, Chennai’s real estate market has shown substantial resilience, offering both opportunities for growth and stability in the foreseeable future.
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