With evident low sentiments in realty sector, Industry experts say that the buyers were slowly vanished from Chennai realty market since last year. Following this, Chennai city witnessed a slowdown in sales rate to the tune of around 33% during 2013. This makes 2013 to become one of the worst happening years for the residential sector.

Sales volume for Chennai apartments has dipped from 30000 units in 2012 to about 19000 units in the year 2013. This also end up in the downturn of new projects from 31000 units in the year 2012 to 21000 units in 2013 thus resulting in a fall of around 35%.

The slowdown in home sales will be observed in projects with a relative higher square feet size because of larger configuration. But, in general, projects with larger configuration are witnessing less traction when compared to projects with compact 2 Bedroom and apartments in Chennai holding total square feet of around 650 to 1300. Additionally, buyer interest is still low towards areas like OMR, GST road etc as they are away from the city centre and they also lack in social and physical infrastructure. Western part of Chennai is showing a better result of around 38% for homes, after a stellar performance shown in the year 2012. Locations like Porur, Mogappair, Manapakkam etc fall below West Chennai. These locations are noticing unprecedented price rise in the range of 10 to 15% per annum during last few decades, thus resulting in various projects breaching many apartments in Chennai.

In the year 2013, central Chennai has been the hardest hit with regards to absorption with sales volume dropping by more than 49% when compared to 2012. Although the number of projects holding home in these localities is very less, developers even find it difficult to sell those units. Since the year 2011, the price of apartments in Central Chennai is in continuous upswing, thus making the cost of affordable homes in Chennai to reach the new benchmark within the micro market. Additionally, the minimum square feet area of newly launched projects starts from 1500 Sq.Ft, thus making the residents to lead a comfortable lifestyle. Appetite for such large investment is limited in the city as it welcomes more affordable homes. This is reflected accurately in the sales number.

During 2013, the prices of housing units are increasing by 5 to 7% despite the sales volume falling by 34%. The drop in absorption and launches has drastically shrunk the sales of Chennai market. Although such a trend was already witnessed in other major cities such as Mumbai, NCR etc, the city witnessed the actual downside sales trend of apartments in Chennai only after July, 2013. The negative sentiment prevailing among home buyers across the country seems to finally affect this realty market too. In the coming months, the sales volume of homes are going to revise with the change in reaction from the developers in terms of decrease in new launches, marginal price reduction and introduction of innovative schemes like stamp duty exemption, free car parking, free furnishing, water supply, gas reticulation, shopping complex, super market and lots more. These features gave way for high sales rate of affordable homes. Short term real estate investors stay away in the year 2013 as the market doesn’t show improvements in terms of economic uncertainty. This is because people prefer to exit the investment when the cost escalates and move on to another investment over 2 BHK apartments in Chennai. However, with low economic slowdown, even the real estate developers and promoters can’t rise the housing cost.

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