The advent of the IT sector along with the setting up of large manufacturing units by multi-national companies (MNCs) have changed the dynamics of Chennai real estate market. Apart from generating thousands of new jobs for the local residents, Chennai has been attracting a large pool of migrants into these sectors from across the country. This has enabled the real estate market to grow at a tremendous rate during the last 5 years especially residential segments which witnessed the launch of more than 1,05,236 flats (units) since 2007.
During 2010 and 2011, more than 49,955 units were launched in Chennai. However, only 33,938 units were absorbed during this period resulting is a significate jump in the unsold units percentage. the percentage of unsold units during the first nine months of 2012 has further increased despite the number of new launches falling drastically.
This is primarily because of the supply overhang of the previous years. Chennai is land locked on the eastern side by the Bay of Bengal, thereby restricting its growth to the remaining three sides. Backed by excellent rail and road connectivity, the city has been expanding three (3) ways over the last few decades.
However, development on the northern side is subdued as compared to West and South Chennai mainly due to the presence of various industrial pockets and port related activities here.
Over the past few years, the focus of developers has been shifting from Central Chennai to the peripheral areas of South and West Chennai due to greater availability of jobs here.
Year % of Unsold Units
2012 * 25%
* Till September 2012
Knight Frank - Chennai
No.3, Gitex Building, IIIrd Floor,
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Phone: + 91 44 4296 9000
Source: Knight Frank Research