Known as the “Gateway to the South,” Chennai’s real estate market has been growing in recent years. Overall, 2015 was a good year for the property market, but what does 2016 have in store? Can we expect to see the market continue to grow, or will there be a slowdown?
Looking at the most recent real estate data trends, it appears that the real estate market in Chennai will not slow down anytime soon. There are several things that are driving the market forward.
IT Driving the Real Estate Market
The IT sector is a major driver of the real estate market in Chennai. The city is the second largest exporter of IT and BPO services, and Chennai as a whole has the fourth largest economy in all of India. As the IT industry continues to grow, demand for housing will continue to grow.
A Popular World Destination
Chennai is also home to the third-largest ex-pat population in all of India after Delhi and Mumbai. The city also made the New York Times’ ‘52 Places to go around the world’ list, and was one of the top 10 “must-visit” cities listed on Lonely Planet’s tourism guide.
Chennai was named the best city in India by India Today in 2014, and has been called the “hottest city” by the BBC because of its mix of modern and traditional culture. As far as food goes, National Geographic rates the city as the second best in the world for food
A Thriving Economy
In addition to being a popular destination, Chennai also has a growing economy. In fact, it is the fourth largest economy in India, and has the third highest GDP per capita.
A Growing Real Estate Market
In 2014, Chennai ranked among the top 25 real estate destinations in the Asia-Pacific. In 2011 there were 1.1 million households in the city, and a surplus of 50,000 residential homes. That surplus is quickly shrinking as more business professionals move into the city searching for homes.
In the first half of 2015, Chennai saw positive home demand from local buyers. Sales in the city accounted for 45% of all residential sales across the leading cities in India. The majority of the sales were concentrated on the mid to high-end segments of the city. As far as pricing goes, prices remain relatively stable in Chennai throughout 2015, but some neighborhoods saw positive growth. This trend is expected to continue into 2016.
Demand for housing continues to be high in Chennai, especially in the commercial sector. Office space is very limited in the city, but demand continues to grow. Currently, vacancy levels are at just 16%, down from 25% in recent years.
Many experts say that the commercial market has reached its peak, but there is room for growth in the residential sector. Many suburbs of the city are seeing tremendous growth in the residential real estate sector, with a number of new properties being developed for a wide range of buyers from budget-conscious to high-end luxury.