Chennai realty goes off rails
Hit by a triple whammy in the form of demonetisation, the RERA Act and GST, the residential realty sector in Chennai hit a new low in 2017. New launches fell by 13% and failed to touch the fivedigit mark, sales fell by 4%, hovering just above 15,000 units, and the average asking price for apartments fell by about 3%. Customers who drove a hard bargain got reductions of up to 10% in apartment prices, in the form of cash discounts or freebies, says Knight Frank’s latest report on the sector.
“Compared to sales and launches in 2011, the fall in 2017 is 56% and 86% respectively. Political instability, natural calamities and overall gloom in market sentiment stagnated signs of recovery noticed in the first half of 2017. A shaky employment scenario has hurt sentiments and encouraged deferment of purchase,” said Kanchana Krishnan, director — Chennai, Knight Frank, releasing the report in the city on Wednesday.
All India launches also fell to abysmal levels, down 78% from the peak of 2010 and 41% lower year-on-year, she said. As against new launches of 4.8 lakh units in 2010 across eight major markets — Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad — only 1.03 lakh units were launched last year. Sales hit a seven-year low, 38% down from the peak of 2011 in all eight markets. While 3.68 lakh apartments and houses were sold in 2011, only 2.28 lakh units were sold last year. “Low sales velocity, high unsold inventory, expectation of further price reductions and inadequate RERA implementation kept buyers away,” Krishnan said.