Real Estate Sales Dip in Chennai in a Big Way CREDAI Chennai 2023 Q3 Report

According to the CREDAI RAW Report finalising in September 2023, the Chennai real estate market has encountered an array of unparalleled difficulties. Sales, residential developments, and the repercussions of increased registration fees are all highlighted in the report published by CREDAI Chennai.

The number of officially registered residential projects in Chennai has experienced a significant decline of 19.39%, from 98 projects in the preceding quarter to 79 projects, as reported by RAW. Additionally, compared to the corresponding quarter of the previous year, which comprised 113 initiatives, there was a reduction of 30.09%.

The number of registered residential units remained relatively stable, which was a silver lining for the real estate market in spite of the decline in initiatives. Compared to the same quarter last year, the quantity increased by 22.95%, from 5232 units to 6433 units, as indicated by the data.

Achieving a cumulative count of 3256 residential units, 2509 units were sold by CREDAI members and 747 units were sold by non-members in Chennai during September 2023. As of September 2023, the unsold inventory for the corresponding period comprised 7833 units, of which 5118 were held by CREDAI members and 2715 were not. South suburbs had the highest proportion of registered projects in the third quarter of 2023, at 30%, followed by Central Chennai at 25% and West Suburbs at 14%, according to data once more. Southern suburbs comprised 47% of registered units, western suburbs 22%, and western central 20%.

Notably, 52.45% of the registered units in Q3-2023 were attributed to CREDAI members, demonstrating their substantial stake. In contrast, the quantity of projects and units approved by CREDAI members decreased in the current quarter compared to the preceding ones.

In Q3-2023, the Chennai real estate market experienced a substantial decrease in sales, despite the substantial representation of CREDAI members (77% in reported sales). In comparison to the previous quarter, sales have decreased significantly by 40.78%; furthermore, they have decreased by 10.45% when compared to the corresponding quarter of the prior year. Such data suggests a significant decline in the Chennai real estate market.

As of the third quarter of 2023, Chennai alone had witnessed the completion of 7833 projects containing unsold residential units. The initiatives contributed a total of 5118 units, of which 65% were created by CREDAI members. A potential transition in the nature of residential developments may be indicated by the declining number of layout projects registered with TNRERA over the past three months.

Members of CREDAI registered 746 residential units in September, compared to 1190 units registered by non-members; in the third quarter, members registered 3374 units and non-members registered 3059.

TNRERA recorded 27 residential projects by CREDAI and 52 residential projects by non-CREDAI in Chennai during the third quarter. In Q3-2022, CREDAI members registered a total of 54 initiatives, whereas in Q3-2023, that number decreased to 27 (compare with Q3-2022). Non-CREDAI registrants numbered 52 in Q3-2023 compared to 58 in Q3-2022, which was not as significant.

"The registration fees that the Tamil Nadu Registration Department increased have had an effect on the figures observed in the quarter ending in Q3 2023." Potentially contributing to the decline in sales, the increased fees have rendered the purchase of real estate more costly.

Sivagurunathan, president of CREDAI Chennai, remarked, "Although CREDAI members continue to wield considerable sway in the market, the indicator of a decline in market activity highlights the complex dynamics at work in the Chennai real estate sector."

In addition to the locations where registrations have been ongoing, "the data indicates the emergence of new micro-markets in Muttukadu and Kanathur in the south suburbs, Surapet and Kodungaiyur in the north suburbs, Madanandapuram and Mel Ayanambakkam in the west suburbs," he continued.