Trends & Rates in Key Localities in Chennai
Chennai is a city of stories, and each neighborhood tells its own tale. Chennai is not only known for its rich cultural heritage but also for its interesting real estate market. So, let’s get straight to it – what’s driving the rental scene in Chennai?
Key Property Trends in Chennai
- The demand for rental housing in Chennai saw a staggering growth. It saw a 14.4% QoQ increase in the 1st quarter of 2023.
- While the demand saw some exceptional growth, the supply stayed down. The supply saw a decrease of 9.7% in the 1st quarter of 2023.
- Considering demographics, males constitute 65% of the primary demands whereas females constitute 35% only.
- Individuals aged between 18 to 35 showed the maximum demand. They accounted for 58% of the total demands.
Unit Size Wise Demand & Supply
Let’s take a look at the unit size wise distribution of the demand and supply for localities in Chennai.
| Unit Size | Demand | Supply |
|---|---|---|
| Below 500 sq ft | 1% | 3% |
| 500 – 1000 sq ft | 13% | 45% |
| 1000 – 1500 sq ft | 35% | 32% |
| 1500 – 2000 sq ft | 28% | 13% |
| Above 2000 sq ft | 23% | 7% |
Things to infer from the above table –
- The majority of the demand and the supply ranges between 1000 to 1500 sq ft.
- As we go from 1500 sq ft and above, the supply reduces drastically.
- There is a very good demand in the 1000+ sq ft region all the way to 2000+ sq ft.
BHK Wise Demand & Supply
Let’s take a look at the BHK-wise demand and supply for localities in Chennai.
| BHK Units | Demand | Supply |
|---|---|---|
| 1 BHK | 5% | 15% |
| 2 BHK | 12% | 5% |
| 3 BHK | 30% | 55% |
| 3+ BHK | 53% | 25% |
Things to infer from the above table –
- The majority of the demand and supply is for 2 BHK and 3 BHK units.
- There is a very huge demand for 3+ BHK but the supply is not adequate. There seems to be a very big opportunity in this unit.
- Supply exceeds demand for the 3 BHK units.
Property Rates in Chennai
Let’s take a look at the property rates of some known places in Chennai. Along with that, we will also go through the growth of the place in the last five years and the rental yield.
| Sl No. | Name of Place | Rate (In INR per sq. ft) | Growth in the last 5 years | Rental Yield |
|---|---|---|---|---|
| 1 | T Nagar | 19,000 | 99% | 1% |
| 2 | Mylapore | 15,350 | 16.3% | 10% |
| 3 | Nungambakkam | 20,650 | 105.5% | 1% |
| 4 | Adyar | 14,050 | 4.5% | 3% |
| 5 | ECR | 10,250 | 46.4% | 13% |
| 6 | Guindy | 11,600 | 42.3% | 1% |
| 7 | Kilpauk | 15,000 | 35.1% | 4% |
| 8 | Perungudi | 8400 | 36.6% | 4% |
| 9 | Ashok Nagar | 12,800 | 12.3% | 3% |
| 10 | Vadapalani | 12,950 | 56% | 1% |
| 11 | Alwarpet | 18,400 | 18.3% | 7% |
| 12 | Besant Nagar | 15,700 | 17.6% | 3% |
| 13 | KK Nagar | 10,500 | 14.8% | 4% |
| 14 | Madhavaram | 6500 | 23.8% | 3% |
| 15 | Korattur | 6350 | 10.4% | 6% |
Locality Wise Preference
1. The western part of Chennai has experienced significant growth, outpacing its eastern counterpart. The reasons can be –
- Western Part of Chennai is nearer to the ports
- Commercial Infrastructure of Western Chennai saw a huge growth
- Western Chennai has better connectivity and access to commercial centers.
2. Out of Chennai’s 12 top small markets,
- 6 are premium
- 5 are affordable
- 1 is luxury
This indicates that the rental market of Chennai has both demand for affordable as well as premium units.
3. Among the top 12 localities, except Velachery, every other locality has either seen a surge in QoQ demand or has stayed the same. Only Velachery declined. This shows that the localities of Chennai have immense potential.
Prime Locations and Neighborhoods
Some of the most searched and prime locations in Chennai are –
1. Adyar: Adyar, known for its upscale residential areas and proximity to the beach, has higher rental rates. The presence of prestigious educational institutions and corporate offices has contributed to the demand for rental properties in this area.
2. Anna Nagar: Anna Nagar, a well-planned residential neighborhood, is popular among families. Its well-developed infrastructure and connectivity make it an attractive choice.
3. Velachery: Velachery, located in close proximity to IT parks and commercial establishments, has become a hub for young professionals. The demand for rental properties therefore is high, and the rates are competitive.
4. OMR (Old Mahabalipuram Road): OMR, also known as the IT corridor, is a hotspot for the city’s IT professionals. The abundance of tech parks and multinational companies has led to a surge in demand for rental properties.
Types of Rental Properties
Chennai’s rental market offers a diverse range of housing options
1. Apartments: Apartment living is a popular choice, especially in the city’s central areas. The convenience, security, and amenities offered by apartment complexes make them attractive to both families and young professionals.
2. Independent Houses: Independent houses provide a sense of privacy and space. Families looking for a standalone property with a garden or terrace are willing to pay a premium for these homes.
3. Shared Accommodations: With the rise of co-living spaces and shared accommodations, individuals and young professionals are opting for shared apartments. This cost-effective option has recently gained popularity among those on a tight budget.
Final Words
In conclusion, the house rental trends and rates in Chennai reflect the city’s real estate market. Property owners should stay attuned to market trends and make informed decisions regarding rental pricing and property management. As Chennai continues to evolve, so too will its real estate market.
