The
advent of the IT sector along with the settingup 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 especically 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 uints percentage. the percentage of unsold uints 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
2007 5%
2008 4%
2009 7%
2010 12%
2011 21%
2012* 25%
* Till
September 2012
Knight Frank - Chennai
No.3, Gitex Building,
IIIrd Floor,
Khader Nawaz Khan
Road, Chennai 600 006.
Phone: + 91 44 4296
9000
Source: Knight
Frank Research
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