Amidst COVID-19 outbreak, Chennai’s residential prices witness 6.7% YoY growth, reveals Magicbricks Propindex Q1, 2020
- Anna Nagar and Ambattur micro-markets witnessed a significant surge in
- Price increments for UC and RM properties in the range of Rs.7,000/sqft and above
At the outset of the COVID-19, Chennai’s residential prices witnessed a YOY increase of 6.7% in the first quarter of 2020, fuelled by development in infrastructure and improved connectivity, revealed the latest edition of Magicbricks’ PropIndex (Q1, 2020).
While the global outbreak of COVID-19 and the ensuing lockdown did impact India’s real estate, Chennai witnessed a decent rise of 6.4% YoY in demand for residential real estate during the Jan-Feb-March period of 2020. Improving connectivity via Chennai Metro, Chennai-Bengaluru infrastructure corridor, and peripheral road are particularly driving the residential market in peripheral regions.
In both the Under Construction (UC) and Ready-to-Move (RM) property categories, positive demand patterns were observed in almost all price brackets in Q1 2020, defying fears of a systematic slowdown in the larger Indian economy. Under construction segment prices also improved with almost 2% price growth YoY. The city reported a noticeable increase in demand for the premium segment that witnessed 20% of its consumer searches for properties costing more than Rs.9,000/sqft.
Commenting on the PropIndex, Sudhir Pai, CEO, Magicbricks, said, “The Government is taking stringent measures to contain the Covid-19 outbreak, but the long-term impact on property market is uncertain, and yet to be assessed. But it seems that the consumer interest has not tapered off. There is a pent-up demand for ready-to-move in properties as our data suggests that the 80% of searches are happening in this segment and the rest for under-construction.”
The PropIndex also suggests that in Chennai, OMR micro-market continues to do well, while being most favored by buyers, as major IT developments and various industries are located within this region. Anna Nagar and Ambattur micro-markets have witnessed a significant surge in demand in Q1 2020, as buyers anticipated the current and upcoming metro lines to significantly enhance the future prospects of these locations.
According to Magicbricks’ PropIndex, the residential sector was primarily being driven by three critical factors:
· Good metro connectivity is turning Mount Poonamallee road into OMR 2.0 for IT firms, driving demand for residential space
· 2 BHK configuration received the most traction in Q1 2020 with 56% of the city's searches falling in this segment
· Outer ring road's Nemilichery to Minjur stretch, and peripheral ring road connecting Poonjeri Junction to Ennore Port, may also get completed in 2020
However, it will be interesting to see how these factors play out as the market recovers from the outbreak of COVID-19 and the ensuing national lockdown.