Chennai to witness high ready-to-move-in supply in 2016

Chennai has been witnessing unprecedented demand for residential property in recent years. To cater to this increasing demand, there has been a steady supply of residential projects across the city. Interestingly, third quarter of 2014 recorded a good residential launch volume pumping over 7000 units into the market.

As per CommonFloor’s research, the trend is mainly skewed towards affordable properties. The city recorded increased number of smaller projects with below 250 units. Thus, with the emergence of variety of new and locally established developers, we can anticipate the tight competitive spirit arising in the Chennai residential property market.
Further, analysing the data, we observed that about 67 per cent of the projects launched in the said quarter are promising completion by the year 2015, followed by 24 per cent in the year 2016. Adding these two together, there is about 66 per cent (i.e. two-thirds of the total quarterly supply) of the supply available for possession by the end of the year 2016.

Further, a closer look on Tier-I builder projects shows that top three projects in the quarter were by eminent builders such as Real Value Promoters, Alliance Infrastructure Projects Pvt.Ltd and Mahindra Lifespace Developers Limited. Interestingly, these are found highly over committed with the possession dates. Although these units look over-committed, surprisingly these projects have the most sold stock in the quarter with about 68 per cent absorption.

So, will these developers fulfill their commitments or rather ‘over-commitment’? Well, let’s wait and watch!