knightfrank h12022

Chennai records 21% YoY rise with sale of 6,951 residential units in H1 2022: Knight Frank India

Knight Frank India in its latest report, India Real Estate: H1 2022 (January – June 2022) cited that the Chennai residential market registered a 21% Year on Year (YoY)growth in sales in H1 2022.The city recorded sales of 6,951 housing units in H1 2022 compared to 5,751 housing units sold in H1 2021.The new home launches also increased by 40% YoY from 5,424 housing units in H1 2021 to 7,570 housing units in H1 2022. The weighted average price of residential properties in Chennai rose by an estimated 5% YoY to INR 4,242 per sq ft. With increased launches, the Quarters to sell (QTS) has marginally increased from 4.2 quarters in H1 2021 to 4.4 quarters in H1 2022.

In H1 2022, office transaction volumes increased by 80% YoY to be recorded at 2.2 mnsq ft. New office completions recorded a growth of 272% YoY with 3.0 mnsq ft of new spaces completed during the same period. IT remained the most active sector which claimed 29% of the transacted space. This was followed by BFSI which saw a rise in its share to 23% in H1 2022 from its previous 6% in H1 2021. Rental values have remained stable with no change on a YoY basis in H1 2022. Suburban Business District (SBD) continued to lead the market with 43% share of total space transacted during the period.


With improved consumer sentiment, the city observed a continuous rise in the number of homebuyer inquiries and conversions in recent period. Homebuyers have become increasingly amenable to explore properties in new locations, for larger spaces with better amenities in order to improve the general quality of life. As a result of that, sales (23%) as well as new launches (40%) saw a noteworthy rise.  The share of sales for units above INR 10mn (INR 1 Crore) category witnessed the a yoy increase 8 percentage points to constitute 23% of all home sales in H1 2022. On the contrary, there has been a notable decline in the share of sales for homes below INR 5 mn(INR 50 Lakhs) to 31% in H1 2022 from 54% in H1 2021. 

South Chennai dominated the sales with 58% of the total sales recorded during H1 2022. The south micro-market locations along the OMR and GST Road have continued to garner homebuyer interest, followed by the affordable locations in West Chennai such as Porur, Valasaravakkam and Poonamalle.

Residential demand was largely focused on the ready-to-move-in or near ready properties which has caused the average age of inventory in Chennai to reduce to 12.6 quarters in H1 2022from 16.5 quarters in the year ago period. The unsold inventory and QTS have increased marginally in YoY terms as launches exceeded demand during H12022.

Srinivas Anikipatti, Senior Director- Tamil Nadu & Kerala at Knight Frank India, Chennai residential market has been a balancing act between price and demand. While being a price sensitive market, with broadly stable values, sales volumes were maintained in the last 24 months. However, prices saw a notable decline post the onset of the pandemic, which triggered a growth in sales of residential markets. As the markets turn upwards, we also see a rise in prices as a combined effect of robust demand as well as rising input costs. Going forward, while we are sure that there is latent demand, the values have to remain within the acceptable threshold for the demand to remain continuous.”


IT sector led with 29% share followed by BFSI sector with 23% of all transactions in H1 2022. The increasing need for flexibility has boosted demand for co-working/managed office spaces in H1 2022 which registered 0.30 mnsq ft of office space transaction in H1 2022, the highest since H1 2019.The share of BFSI sector in total pie increased to 23% from 6% in H1 2022 recording the maximum increase across all sectors. 

The SBD accounted for 43% of the total share of space transacted in Chennai followed by CBD with 25% in H1 2022. CBD and SBD OMR districts witnessed maximum increase in share of total space transacted. CBD’s share of space increased from 12% in H1 2021 to 20% in H1 2022 whereas SBD OMR’s share of space increased from 18% in H1 2021 to 25% in H1 2022. 

In the first half of 2022, Chennai’s vacancy rate was 14%, which is comparable to other significant markets like Bengaluru and Hyderabad Srinivas Anikipatti, Senior Director- Tamil Nadu & Kerala at Knight Frank India, Despite the impact of third wave of the pandemic in early 2022, Chennai’s commercial market remained strong, as offices reopened, resulting in increased transaction activity. We expect the city to see a continued rise in the office market, given its inherent advantage of cost as well as high quality of office space.”

Previous post Mercure Chennai Sriperumbudur presents a culinary journey through Chennai to Paris Food Festival from 11th to 22nd July 2022
Next post <strong>SmartIDEAthon 2022 Begins at GITAM,<br>Entries Received from 27 states</strong>