The residential market in the city is showing signs of a modest recovery as both launches and sales reflect positive growth year-on-year in the first half of 2019, according to a report by Knight and Frank.
Launches, at 7,762 units in the first six months of the year, grew by 19% year-on-year, on the back of the Tamil Nadu Combined Development Regulations (TNCDR) and Building Rules notification of February 2019. Of the total launches, 74% belong to the sub-₹50 lakh category.
The first half of the year also saw a modest 5% growth in sales, on the back of demand for affordable housing units.
Last year, during the same period, the sales numbers stood at 8,585.
Price correction
This year residential prices have also corrected by 3% to ₹47,110/sq. m (₹4,377/sq. ft) from ₹48,567/sq. m (₹4,512/sq. ft) last year. Unsold inventory came down by 21% to 17,810 units.
The report also pointed out that the present water crisis in Chennai has been slowing down construction activity and could eventually result in 6-9 month project delays. The water stress is bound to impact the construction of office space, slated for a 2021-22 launch.
In the office space, there has been positive growth. Joseph Thilak, Senior Director-Occupier Solutions, Chennai, Knight Frank India, said, “Increased activity in the co-working industry has significantly contributed to the growth of Chennai’s office market. However, inadequacy of quality supply continues to remain the biggest challenge.”
The IT/ITeS sector, once the largest consumer of office space in the city, showed a downward trend in the first half of 2018. In the second half of 2018, it started showing positive signs, but now in the first half of 2019, its share of total office space consumption has again dwindled.