Chennai: The Chennai residential market stands to take a leap in demand from end users on account of expected job creation to the tune of 2,00,000 by 2022. The city expects to see a slew of professionals entering the property buyers’ market as the commercial space activities improve. This was revealed by JLL, India’s leading real estate consultancy firm, which identifies the following factors as a catalyst for the overall growth of the market.
2,00,000 new white collar jobs creation in Chennai.
An estimated 15 million sq. ft. of office space is expected to get absorbed in the next 5 years creating an close to 2,00,000 new white collar jobs in the city. New jobs are a leading indicator of impending housing demand, as it helps in positive wealth creation, which will further lead to asset creation in form of residential real estate. Chennai office vacancy declined to 9.2% in 2017 from 19.5% in 2014. Falling office vacancy and improving office absorption reinforced confidence among major developers such as Brigade, DLF, Embassy, RMZ and K Raheja Corp to come up with new office projects in the city.
Ramesh Nair, CEO and Country Head, JLL India said, “Since last two years, Chennai’s real estate market has shown resilience and resurgence. The city fought challenges ranging from natural calamities to political crisis and fended itself well from national level policy changes such as demonetization and RERA. The implementation of GST also influenced the property markets in 2017 across the country. Towards the end of 2017, Chennai attracted new investments such as, Peugeot and Freudenberg and saw more investments coming from existing players such as Hyundai and Saint Gobain. Chennai has also attracted about US$ 8 Bn in private equity since 2008 and ranks fourth after Mumbai, Delhi and Bangalore. We expect the share and the absolute value to increase as more global companies starts to show interest in the market for its talent pool and attractive rental values.”
Home buying is more affordable now.
Chennai has been seeing a regular drop in unsold inventory which recorded an estimated drop of 25% compared to its highest recorded in 2014. The Chennai residential market consistently absorbed close to 20,000 new housing units every year. To maintain the sales velocity and add to the attractiveness of the market, developers have responded with suitable projects matching the new preferences shown by the market and have consistently worked in keeping the ticket price low for new apartments. With average property prices INR 4,529 per sq. ft. basis, the overall ticket size of the apartment has become affordable to a much more expanded universe of buyers.
Ramesh Nair further added, “With the prices remaining stable during the last two years, the market is conducive today for the property buyers. Considering the inflation and price stability, home buying is even more affordable today than two years back. Today, Chennai market presents a unique opportunity with a healthy pipeline of ready to occupy residential units that have minimal risk for the buyers.”