CREDAI Chennai Q2-2024: Real Estate Market Shows Mixed Results

CREDAI Chennai’s Q2-2024 Report: Mixed Results for the City’s Real Estate Sector

CREDAI Chennai’s Research and Analysis Wing (RAW) has released its Q2-2024 report, highlighting a combination of positive trends and challenges in the city's real estate market. The report, covering the period from April to June 2024, reveals significant fluctuations in project registrations, residential unit sales, and inventory.

Key Insights from the Q2-2024 Report:

• New Project Registrations: Chennai saw the registration of 65 new projects in Q2-2024, 65% of which were by CREDAI members. However, this marks a 34% drop compared to the 98 projects registered during the same period last year, reflecting a slowdown in new project launches.
• Residential Unit Registrations: On a more positive note, the number of residential units registered surged to 8,793, representing a 37% increase from Q2-2023. CREDAI members accounted for 90% of these registrations, further solidifying their dominance in Chennai’s real estate landscape.

Geographical Breakdown:

• Central Chennai led in project registrations, accounting for 29% of the total projects.
• The South Suburbs captured 28% of the project registrations and dominated unit registrations, contributing 45% of the total units. This underlines the growing appeal of the South Suburbs for both developers and homebuyers.
• The West Suburbs accounted for 19% of unit registrations, indicating steady interest in this region.

Challenges Facing the Sector:

Despite the growth in residential registrations, the report also points to significant challenges. As of June 2024, the inventory of unsold residential units in completed projects stood at 7,989 units, signaling a slower absorption rate. Sales have also taken a hit, with only 2,597 units sold in Q2-2024—a 53% decline compared to the 5,498 units sold in Q2-2023. This drop in sales suggests developers are struggling to clear unsold inventory, which could hinder the launch of new projects.

Industry Reactions:

Mohamed Ali, President of CREDAI Chennai, voiced concern over the decline in new project launches and sales. "The Q2-2024 analysis is a crucial moment for Chennai’s real estate sector. While we’re pleased with the rise in residential unit registrations, the drop in project launches and sales emphasizes the need to tackle existing challenges. By addressing regulatory hurdles and fostering government-industry collaborations, we can unlock Chennai’s full potential as a top real estate destination,” said Ali.

Aslam Mohamed, Secretary of CREDAI Chennai, highlighted the issue of unsold inventory, stating, "Developers are focusing on larger projects, but the growing stock of unsold units shows a mismatch with market demand. It's vital that future projects align more closely with buyer needs."

Outlook:

While Chennai’s real estate market shows promise in certain areas, such as residential unit growth, the significant drop in sales and new project launches underscores the need for strategic adjustments. Tackling unsold inventory and aligning developments with buyer preferences will be key to overcoming the challenges posed in Q2-2024.


 

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