CHENNAI: The real estate sector in Chennai, going through a bad slowdown exacerbated by the dip in sentiment following the floods of December, 2015, is set to see a continued fall with new launches in 2016.
Prices might well rise, hopes the sector, as the falling inventory would result in more demand than supply.
According to data provided by global real estate consulting firm JLL India, 2015 had already seen new launches fall in the Chennai residential market by 62%.
Absorption rates have gone up subsequently, going from 26.6% in 2014 to 31.3% in 2015. The results of the development have seen a substantial reduction in inventory.
According to data from the firm, the number of units sold was 20,484 in 2015, only 1% lower than the previous year.
However, inventory, the number of unsold units stood at 45,017. While it was high, it was nearly 21% less than 2014’s figure.
The figures, which were released by JLL India during a conference and panel discussion organised in collaboration with the Conderation of Real Estate Developers’ Association of India’s Chennai Chapter on Friday, have been corroborated by Chennai’s real estate sector representatives as a sign of improvement and a portent of price rise.
Speaking at the panel discussion, T Chitty Babu, chairman and CEO of Akshaya Homes, said that with demand absorbing supply and new launches on hold, it could see prices increase. “With new projects expected to hit the market only after sometime, there will be some price appreciation,” he said.
The statement was echoed by several other members of CREDAI and even the banking community.
R Kumar, deputy general manager, real estate and housing business unit, State Bank of India, said that the sector had seen a slight turnaround in the last part of January. “But people are looking for better and slightly more expensive housing, in the `50 lakh to `1 crore range. That segment is doing well,” he said.
Other representatives say that this would be the right time for customers to buy, because prices might increase later.
“The industry is currently offering various discounts, but they would not last long,” said Sanjay Chugh of JLL.