Chennai’s housing market experienced a downturn during the second quarter of 2024, with both sales and new project registrations taking a hit. According to a report by the Confederation of Real Estate Developers Associations of India (CREDAI) Chennai, housing sales dropped by 13% compared to the previous quarter, with 2,597 units sold between April and June. This decline was a significant drop from the 2,983 units sold in the first three months of the year.
The slowdown extended to new project registrations as well, with only 65 projects registered with the Tamil Nadu Real Estate Regulatory Authority (TNRERA) during Q2-2024. This marks a 17% decrease from the first quarter and a significant 37% decline compared to the same period last year, when 98 projects were registered. This trend signals a reduction in new project launches, raising concerns among developers.
Despite these declines, there was a positive development in the number of residential units registered with TNRERA. The second quarter saw a 22% increase in registered units compared to the previous quarter, with 8,793 units registered. This represents a 37% jump compared to the same period last year.
A source from CREDAI explained, “Developers are increasingly focusing on larger projects with more units.” However, the inventory of unsold residential units in completed projects remains a significant challenge. As of June 2024, there were 7,989 unsold units, reflecting a slight 1% increase from the same period last year. “This underscores the difficulties in absorbing existing stock, which poses challenges for developers planning new launches,” noted a developer.
Mohamed Ali, President of CREDAI Chennai, expressed concerns over the steady decline in new project registrations. He stated, “The Q2-2024 analysis reflects a pivotal moment for Chennai’s real estate market. While the rise in residential unit registrations is encouraging, the drop in project launches and sales highlights the need for strategic efforts to address existing challenges. By overcoming regulatory bottlenecks and fostering government-industry collaboration, we can unlock Chennai’s true potential as a leading real estate destination.”
Aslam Mohamed, Secretary of CREDAI Chennai, emphasized, “While developers are progressing with larger projects, the growing unsold inventory indicates a misalignment with market demand. It’s essential that we tailor new developments to better meet the evolving needs of buyers.”
In terms of geographic distribution, Central Chennai led the way with 29% of the total projects registered in Q2-2024, followed by the South Suburbs at 28%. Viswajith Navin, director of Navin’s, emphasized the importance of boosting economic activity and high-paying jobs to support the real estate sector. He explained, “The state government should focus more on creating job opportunities that pay at least Rs. 2 lakh per month. This will help people afford homes, which in turn will stimulate the real estate market.”
The current state of the Chennai housing market presents a mixed picture. While there is some positive movement in terms of registered units, the decline in new projects and sales, coupled with the growing unsold inventory, signals a need for careful strategizing and collaboration between developers, the government, and other stakeholders to address the challenges and unlock the full potential of Chennai’s real estate market.
