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FOREWORD

The Indian real estate sector is at crossroads today. The real estate markets across all the major cities have been
stagnant with low transaction activity. The market is saddled with large unsold inventory which at current rate
of sales velocity will take more than four years to clear. Amidst this environment, there have been repeated calls
for reduction in the prices of residential assets. Market watchers believe that only rationalization in prices can
break this logjam and lead to more transaction activity.
But what are the current price levels? And how much room does a developer have to reduce prices? In our
current edition of PropIndex (Jul-Sep 2015), we look at the price trends across major cities. As different budget
segments have unique demand-supply scenario, weve divided the capital value (Rs/sq ft) range in each city into
eight budget segments. The trend analysis has been done on a Q-on-Q basis for a two year period between
Jul-Sep 2013 and Jul-Sep 2015.
Our analysis shows that prices across different budget segments in each city have remained stagnant over the
evaluation period. Comparing the cities basis their weighted average price movement over the two year period
shows that except for Pune and Chennai, none of the cities have even managed to get a double digit growth.
Even in case of these two cities, the price increment has been 11.8% and 10.8%, respectively. Delhi was the
worst performer with a net decline of 14.8%. Big mid-segment real estate markets like Bengaluru and Noida
saw 7.6% and 3.2% price increment. However, when these marginal increments in prices are adjusted for
inflation, we find that the net movement in prices is either zero or even negative.
This stagnation in the market is reflected in the Jul-Sep 2015 National PropIndex which remained at the same
level as the previous quarter. In case of individual cities, Bengaluru again witnessed the maximum appreciation
of 4% while Delhi declined further by 5%. Western cities of Pune, Mumbai and Ahmedabad all witnessed
positive movement in their city indices.
Today, the developers understand the requirement of easing acquisition cost for consumers. Towards this end,
they have come up with various attractive payment plans like subvention schemes where EMI till possession is
paid by the developer or possession linked payment plans. Apart from this, they are also offering freebies and
discounts. When the financial saving from these payment plans or freebies/discounts are factored, it translates
into 5%-15% saving to the consumer. With RBI easing policy rates and attendant reduction in home loan rates,
the developer community expects that the combination of lower interest rates and freebies/discounts will get
the fence sitters to take the leap.
Therefore, in short to medium term, we do not expect developers to take the drastic step of upfront reduction in
capital values. They are more likely to persist with discount and freebies to pass lower cost to consumers. An
upfront reduction in prices may send strong negative signals and have a domino effect. Consumers may start to
hold their purchase decision expecting prices to fall further.
These are changing times and we would love to hear from you. Do write to us at Sudhir.pai@timesgroup.com
and share yours views on this report and how we could make PropIndex even better.
Sudhir Pai
CEO, Magicbricks.com

METHODOLOGY
Magicbricks PropIndex
Magicbricks PropIndex
is a tool which
empowers property
seekers and investors
with detailed
information on the
movement of residential
apartment prices and
supply of properties in
India. No credible
property index can be a
function of direct values
as the changes are
governed by multiple
factors.
Magicbricks PropIndex
has taken this reality
into account and
produced an index based
on listing of apartments
and their capital and
rental values on the
website.
Magicbricks has over
12,00,000 active
properties posted by
more than 2.5 Lac active
users in 600+ cities and
17,000+ localities. Our
users include owners,
agents and developers.

Methodology
Apartment values are
based on listings on
Magicbricks. These
include multi-storey
apartments and single
units on plotted
developments, referred
to as builder floors on
Magicbricks.com.
The Index is structured
in such a way that
individual properties

are aggregated into their


respective cities and
then to the National
Index. Weightages for
PropIndex are based on
the supply of properties
within the locality/city.
Based on this structure,
PropIndex gives a
realistic picture of
trends in price/supply
across different property
markets in each city. We
have used different
weightages for Listed
Price Monitor/Rent
Monitor. Therefore, read
as a whole, PropIndex
along with tables
provided for Listed Price
Monitor, Rent Monitor,
Yield Monitor and
Capital Values, gives an
excellent perspective of
the property market
performance in the
quarter.
While listing and its
values/supply provide a
level of understanding
of the market, there are
meticulous data checks
to prevent aberrations
creeping in the Index.
These are based on
statistical calculations,
industry inputs and
logical interpretations.
The National Property
Index (NPI) is indicative
of the extent of activity
as well as price
movements across cities
and localities in the
major cities active on
Magicbricks.com. The
index includes the top
11 cities (these have

been chosen based on


their activity levels) and
has an individual city
report for each of these
cities. While the NPI and
its movements are of
interest to the expert
community of bankers,
builders and investors,
the PropIndex has also
taken care to explain the
nuances of index
movements at the
locality level that would
help the huge base of
Magicbricks.com
consumers.
Insights into consumer
demand have been
gathered through
analysis of search
information on the site.
This helps understand
the best localities by
demand, the type and
configuration of units as
well as the budget-wise
preferences.
The PropIndex is the
result of meticulous
research at the locality
level and through
detailed discussions
with experts at
Magicbricks.coms
offline and online
initiatives.
The Indian real estate
market is dynamic and
the PropIndex reflects
those changes. Since it is
derived from a dynamic
database, additions and
deletions of localities
happen as a function of
market dynamics.

GLOSSARY & DEFINITIONS


There is a wealth of information within these pages. For better readability, we have presented some data as tables and others as
graphs. Between them, you will find how property markets have performed in the Apr-Jun 2015 quarter from different
perspectives from that of capital appreciation, from a rental/yield realisation perspective and from a supply standpoint. Demand
Analysis section also explains what consumers look for.
We recommend that you evaluate the city report in its entirety and that will provide a rounded perspective of the performance of
the property market within each city. Here are the details of what you will find in each of the city reports enclosed within:
1.

City Property Index This is a composite index which is a function of supply of properties as well as the average capital
appreciation/drop in various localities of the city in the quarter. The City Index is the weighted average of the average rate per
square foot in that locality and the supply of properties from that locality. Premium localities (with higher average rate per
square foot) as well as localities with higher supply of properties will have a bigger impact on the Index. For example, if the
supply of properties from a premium locality drops, that locality will end up having a lower weightage in the Index which in
turn will push the Index downwards (and vice-versa). On the other hand, supply of properties remaining unchanged, the
Index will be influenced by capital appreciation within the locality.

2.

Listed Price Monitor This metric shows the capital appreciation/drop within a locality and is calculated on the basis of
movement in the average rate per square foot within that locality. By and large, the movement in the average rate per
square foot reflects capital appreciation/drop. However, in a few select cases, we have observed that the average rate per
square foot moves due to a change in the mix of apartments within that locality (e.g. if the ratio of premium apartments,
which command a higher per square foot rate, changes over the quarter). In these few circumstances, the Listed Price Monitor
will, in turn, reflect this input. Such changes have been explained in the text of the City Reports.

3.

Rent Monitor This reflects the rental appreciation/drop within a locality. It is calculated on the basis of movement in the
average rent per square foot within that locality. By and large, the movement in the average rent per square foot reflects
rental appreciation/drop. However, in a few select cases, we have observed that the average rent per square foot moves due to
a change in the mix of apartments within that locality (e.g. if the ratio of premium apartments, which command a higher per
square foot rent, changes over the quarter). In these few circumstances, the Rent Monitor will, in turn, reflect this input. Such
changes have been explained in the text of the City Reports.

4.

Yield Meter Yield is the annual rate of return earned on property. The Yield Meter depicts the gross yield percentages
across various localities. Gross yield is a ratio of average annual rental value to the average capital value of the property.

5.

Capital Value Tables (given in Annexures) This shows the actual range of prices within which properties were available in
each locality in the quarter. Prices are shown in Rupees per square foot basis, these are the prevailing rates for properties in
each locality.

6.

Price Trend Analysis This analysis of looks at distribution of real estate assets on the basis of capital value (Rs/sq ft).
We have grouped the city localities into various budget segments on the basis of their capital values. We then evaluate the
historic price trend for these budget segments over a two year period from Jul-Sep 2013 - Jul-Sep 2015.

7.

Editorial Speak PropIndex has gone from strength to strength adding more analytics, insights and diverse views in
every edition. To enhance the insights provided by our data, PropIndex now includes city perspectives from editors of the
Times Property.

N OTES

VOL 5, ISSUE 2; JUL-SEP, FY 2015-16

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[National Property Index (NPI)]


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n line with the general lack of activity in


the residential real estate market, the
National Property Index has also
remained stagnant over the previous
quarter. This is in continuation of the general
trend of inactivity observed in the market
over the last many quarters (including the
current period between Jul-Aug 2015).
NPI is the weighted average of supply and
capital values across 11 cities in India.
Regionally, North India comprising of
Delhi, Noida/Greater Noida, Ghaziabad and
Gurgaon, saw an average drop in the Index
values. Compared to this, while the Index in
the South Indian cities on an average
remained at the same level as in the last
quarter, West India saw an average rise of
2% in the Index values. Kolkata in the east
also saw the Index values remaining at the
same level as the previous quarter.
The movement in Index in the quarter can
be attributed to an average 13% increase in
supply and partly due to six out of the eleven
cities having more than 50% localities with

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price increment. However, only one city saw


some positive movement in the Price
Monitor while others either stayed at the
same level or witnessed an overall dip in the
price levels.
Bengaluru again emerged as the city with
maximum increase with the Index having
grown by 4% in the evaluation quarter. This
was followed by Mumbai with 3% increase
and Gurgaon with 2% increase. The largest
drop in the City Index was again witnessed
in Delhi with the Index value falling by 5%.
Except for Gurgaon, cities in the North either
witnessed a drop in Index values or
remained at the same level as in the last
quarter. Ahmedabad City Index grew by 1%
as compared to the last quarter.
While the Reserve Bank of India (RBI)
lowered the interest rates, leading to banks
passing on the benefit to consumers in terms
of lower home loan rates, the same might
not be sufficient enough to address the issue
of low transaction volumes and large
inventory pile-up. The festive season and the
associated discounts and freebies given by
developers, along with lower interest rates

may have some positive impact on the


transaction activity on the ground.
Today, the biggest concern which the
consumer has in respect to the real estate
market is lack of confidence in the developer
community. With many projects having been
delayed and lack of clarity on their
completion timelines, the consumer is vary
of investing his money in the market,
especially in new launches or underconstruction projects.
Therefore, it is imperative on the part of
the developer community to bring
transparency and take the consumers into
confidence. While payment schemes like
possession linked payment plan have been
offered by several developers to allay
consumer fears of non-delivery and credit
getting stuck, more efforts are required to
increase the transaction momentum.
IN THIS REPORT:
National Property Index...............1
Chennai.....................................4
Annexures.................................13

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VOL5, ISSUE 2; JUL-SEP, FY 2015-16

-1%

NATIONAL PROPERTY INDEX


The City Index for Ahmedabad
experienced an increment of 1% as
compared to the previous quarter. An
increase in supply across all localities of the
city was observed. While some localities
witnessed a double digit growth in supply, it
is important to add, that most of them had
low base numbers initially. Of the localities
in the city, a substantial 43% of them
witnessed an increase in prices.
More than 65% localities in the
Bengaluru real estate market witnessed an
increase in the average capital values and
the overall supply also increased by 10%.
Bengaluru City Index again saw maximum
appreciation of 4% in the last quarter. The
Eastern and South-East parts of Bengaluru
comprising of Whitefield, Sarjapur Road and
Electronic City, remainrd the largest
contributors to the supply in the city.
The Chennai City Index saw a marginal
increment of 1% in the Index values in this
quarter. There was an 11% increase in active
listings in the city with 57% of the localities
witnessing positive movement in capital
values. Overall, the Price Monitor for the city
fell by 5% as drop in values was more than
what could be compensated by the price
increment.
Delhi again witnessed a decline in the
City Index while the Listed Price Monitor
remained at the same level. The Delhi City

Index fell by 5% for the Jul-Sep 2015


quarter. As observed in the other cities,
Delhi also saw an overall increase in the
active listings but only 30% of the localities
saw any positive movement in the price
points. Except for a few localities remaining
at the same price level as the previous
quarter, most of the 69% of the balance
localities saw a decline in capital values.
Ghaziabad saw a 2% decline in the Index
values accompanied by 2% decline in the
City Price Monitor as well. This was on
account of 73% localities witnessing a drop
in values. Indirapuram and Raj Nagar
Extension continued to be the dominant
localities in terms of supply in the
Ghaziabad real estate market. Both these
together contributed more than 50% of the
total supply in the market.
In Gurgaon, the supply of active listings
in the market increased marginally by 3%.
A drop in the average capital values arrested
the growth of the City Index. More than
60% of the tracked localities witnessed a
drop in the average capital values. Sohna
Road area remained the most preferred
locality in the city.
Unlike the previous quarter where
Hyderabad had the second highest
increment in the Index Value, the city
recorded a drop of 4% in the City Index
Values during this quarter. The western part
of Hyderabad centered on Gachibowli and

comprised of other localities such as


Manikonda and Kondapur which continued
to be the top localities in terms of active
listings. On an average the localities
witnessed less than 1% increase in
property values. The city also saw an
increase in the overall number of active
property listings.
The City Index for Kolkata remained
stable over the past quarter. More than
55% of the localities saw a drop in capital
values while the remaining 39% of them
saw some increment. The localities on an
average witnessed a 1% drop in capital
values. However, the City Price Index
remained stable over the quarter. Localites
such as Rajarhat, EM Bypass and Garia
continued to be the top localities in terms
of availability of actively listed
properties.
Mumbai noted the second highest
increment in the City Index after Bengaluru.
While the City Index improved by 3%, the
Listed Price Monitor remained at the same
level as the previous quarter. The localities
saw an average increase of less than 1% in
capital values with 62% localities having a
positive movement. Most localities along
the Western Expressway had an increment
in capital values.
The City Index as well as the Listed Price
Monitor for Noida remained stable in the
previous quarter. While 53% of the localities
witnessed a positive movement in capital
values, the overall increment in the city was
very low. Noida Extension and sectors
situated along the Noida-Greater Noida
Expressway continued to be a source of the
most active listings.
With 63% localities experiencing positive
growth in capital values and an overall
increase in the number of active listings,
Pune saw a 1% increase in the City Index.
However, the Listed Price Monitor decreased
by 1%. Kharadi and Vimang Nagar in the
North of the city together accounted for
most of the listed properties. Apart from
them, Wakad and Wagholi also contributed
greatly to the supply of the actively listed
properties in the Pune real estate market.

VOL5, ISSUE 2; JUL-SEP, FY 2015-16

INDIAN REAL ESTATE MARKET


FUTURE SCENARIO
The Indian real estate market has been
stagnant in terms of transaction and capital
value of real estate assets. The number of new
project launches has tapered drastically in
most cities compared to the earlier years. With
small exceptions, sale of units has fallen
further from the decline of the previous year.
The fall in unit sales over the last few years
has translated into a large inventory of unsold
stock. By one estimate, the total number of
unsold inventory exceeds 700,000 units and
the market will require more than four years to
clear this. One of the main reasons for the fall

in new project launches is the level of unsold


inventory in the market.
Consequent to this logjam , the prices have
also remained stagnant over the last couple of
years. To understand the price trends,
Magicbricks analyzed the weighted average
price for 11 cities in the PropIndex.
The weighted average price for a city takes
into account the average price of its localities
and the weights assigned to each is the supply

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propindex.magicbricks.com

in that locality. The analysis has been done for


a two year period from Jul-Sep 2013 to Jul-Sep
2015. For ease of comparison, cities have been
divided into segments having weighted
average price greater than Rs 6,000 per sq ft
and with prices lower than Rs 6,000 per sq ft.
As the graphs shows, the prices in the cities
have either seen very low rise or outright drop.
In case of the four cities with weighted
average price greater than Rs 6,000 per sq ft,
Pune with 11.8% increase is the only city with
any visible price movement.
Mumbai and Delhi have seen a drop in
values. In fact, Delhi witnessed the largest
drop amongst all cities. Gurgaon also remained

stagnant with negligent growth. Even in case


of Pune, when inflation is taken into account,
the price increase is nullified.
In case of the other seven cities with a
weighted average of less than Rs 6,000 per sq
ft, the story repeats itself. With 10.8% increase
during the evaluation period, Chennai saw the
highest increment. With the exception of
Ghaziabad, other cities also saw a marginal
price increase. The prices in Ghaziabad city
actually dropped by 6.6%.

Given the high inventory level and low sales


volume, the market needs to correct the prices.
Our analysis shows the prices have been
stagnant for over two years now. When this is
indexed to inflation, the values have dropped.
Short of announcing a cut in prices,
developers have used innovative schemes to
lower the acquisition cost. These vary from
attractive payment schemes to giving freebies
like modular kitchen and other white goods to
offering discounts or waiver on charges like car
parking, club house etc. The developers are
also ready to offer up to 25% discount on the
total cost in case it is a one time payment.
The impact of the schemes is such that prices
have already come down by 10%-20%. This is
demonstrated with an example. Lets assume a
1400 sq ft property costs Rs 60 lakh, Rs 4,286
per sq ft in capital values. This comes with a
subvention scheme where the developer pays
the EMI on the loan amount during the
construction period. The EMI is transferred to
the consumer on possession. Assuming a loan
amount of Rs 48 lakh (80% of the unit value),
interest rate of 9.5% and a loan tenure of 25
years, the EMI is Rs 41,937 per month.
The developer pays this EMI for the
construction period of 24 months. The total
amount paid is slightly more than Rs 10 lakh.
Simply put, the actual cost to the buyer is
Rs 50 lakh, translating into a rate of Rs 3,567
per sq ft, a discount of almost 17%.
Developers are expecting that freebies and
attractive payment plans combined with the
recent drop in home loan rates will help in
reviving sales. Therefore, in short to medium
terms, developers are unlikely to have any
incentive in dropping the prices upfront.

propindex.magicbricks.com

CHENNAI

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VOL5, ISSUE 2; JUL-SEP, FY 2015-16

[CITY INDEX]

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The City Index increased by 1% while the Listed Price Monitor declined by 5%

CHENNAI REAL ESTATE IN PERSPECTIVE


CHENNAI

Q2 2015

As it happened
12 cities of Tamil Nadu get selected
for the Smart City project

CM inaugurates citys first fullyautomated multi-level car parking

State housing board to construct


2,300 LIG flats at a cost of Rs 380 cr

Corporation seeks residents ideas


on making Chennai a smart citiy

Bus terminus to come up near


Vandalur to improve city connectivity

Illegal buildings should face only


demolition, Madras HC rules

HOT
Chennai saw biggest land deal of $220 million or nearly
1,460 crore in September as Shapoorji Pallonji Group
and Canada Pension Plan Investment Boards joint
venture company acquired SP Infocity IT Park
State govt signs a 900-crore deal with Embassy Group
for a 198-acre industrial park in Sriperumbudur

NOT
A gazette notification issued by state govt legalising
purchase of lands near protected areas or tiger
reserves shocks environmentalists
Corporation failed to take any major initiative to
improve basic infrastructure on the outskirts of
Chennai in recent years, reports say

VOL5, ISSUE 2; JUL-SEP, FY 2015-16

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CHENNAI

[PROPINDEX - CHENNAI]
The city witnessed the second highest gain amongst south Indian cities for Jul-Sep 2015 quarter. There is
an overall increase in the average capital values for 57% of localities across the city. But decline in balance
43% led to 5% decrease in the Listed Price Monitor of the city.

[Key Takeaways]
l

The Chennai real estate market caters


primarily to the mid and affordable
segments which together account for
almost 60.3% of the active listings in the
market. These segments consist of four
price brackets between Rs 3,000 per sq ft
to Rs 4,999 per sq ft
The consumer base in these price
segments is very sensitive to economic
scenario and price movements.
Consequently, the transaction volume
over the last two years has declined
leading to a large pile up of unsold stock
The premium and luxury segments
together constitute approximately 40%

share of the market. The premium


segment (Rs 5,0009,999 per sq ft) has
about 27.5% of the overall share.
l

The luxury segment has a relatively small


12.2% share of the Chennai market. This is
spread across prime localities in the heart
of Chennai and the suburban areas
situated adjacent to them
Overall, the weighted average price for
Chennai has seen only 9.7% increment
over the last two year period between
Jul-Sep 2015 to Jul-Sep 2013. Though the
market did recover somewhat during the
Jul-Sep 2015 after a 4% decline seen in
the Jan-Mar 2015 period

The announcement of Chennai in the


Smart Cities project list has helped improve
market sentiments. The increased investments
as part of this project are expected to improve
the social infrastructure resulting in a likely
spurt in buying activity in the residential and
oce space. The success of the recently
organised Global Investors Meet (GIM) which

Amongst the different price brackets in


the real estate market, the luxury
segment in Rs 12,000 per sq ft and above
bracket witnessed the maximum price
increment of 14.6% over the last two
years in the city
The Rs 8,0009,999 per sq ft segment
was the worst performing price range. It
saw a decline of 0.3% in prices during the
same time period
The largest price segment by supply,
Rs 4,5004,999 per sq ft, registered only
6.2% price increment in this quarter. This
is indicative of a sluggish real estate
market and low demand

EDITORIAL

A resurgent Chennai
fter being plagued by reports of a
sluggish market and unsold
inventories, the real estate in
Chennai is slowly showing signs of
improvement on the back of a recovery in the
IT and manufacturing sectors. Unlike
Bengaluru, the Chennai market is dependent
on these two sectors and uncertainty here hits
the market. Despite all the problems, overall,
the Chennai realty market was the most stable
in the southern part of the country.

opened up windows for foreign investment in


the realty sector has also acted as a fillip. The
rate cut announced by the Reserve Bank of
India recently is another factor that has worked
in favour of the real estate sector.
While the cost of construction has gone up,
real estate consultants say there has been a
correction as prices have bottomed out.
Lowering of prices and benefits to the
customers in the form of discounts and oers
has ensured a positive response from buyers.
The luxury market has done well with the
demand for high-end homes going up.
Facilities that were once meant only for the
elite class are now being provided even in the
mid-segment homes and have encouraged
consumers to buy. The flip side is of increasing
cases where people felt they ended up paying
for facilities that they didnt really need.

One positive aspect of the last quarter was


the heightened activity in the aordable
housing sector. Perumbakkam, Medavakkam
and Naganallur were among the residential
markets that saw a lot of development activity.
The oce space segment also showed a
marked improvement with reports stating that
the market witnessed an absorption of
approximately 3.6 million sq ft this year. Areas
with maximum traction were OMR, Mt
Poonamalle Road, Guindy and Ambattur. The
mood continues to remain upbeat as demand is
expected to go up further.
While the next quarter is expected to be
much better, it remains to be seen how much
of the promises made at the GIM will translate
into investments and how will the rate cut
impact buyers. Till then most buyers are likely
to follow a wait and watch policy.
sangeetha.nambiar@timesgroup.com

CHENNAI

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VOL5, ISSUE 2; JUL-SEP, FY 2015-16

[PRICE TREND ANALYSIS]


[Residential distribution by capital value ]
Mid-budget segment is the largest category
l

The graph shows the distribution of


residential assets by capital values. Over
60.3% assets are in the Rs 3,0004,999
per sq ft category.
Within this budget range, the categories
differ by Rs 500 per sq ft. This indicates
price sensitive nature of the market as
minor difference in prices impacts the
saleability of the project
In addition to dominance of relatively
lower capital value, 2BHK is the dominant
format from both consumer preference
(53% share) and supply (49% share). Its
relatively smaller saleable area helps to
keep the overall acquisition cost low

Given the income profile of consumers in


this segment, it is sensitive to any
movement in capital values
The premium segment of Rs 5,000-9,999
per sq ft range has a share of 27.5%, with
most options being 3BHK formats with
large saleable area. This further increases
the overall acquisition cost
The Rs 10,000 per sq ft and beyond luxury
segment has a small share of the market.
It constitutes 12.2% of active listings
Analysis of two year trends shows
percentage distribution is more or less the
same as for the Jul-Sep 2015 quarter

[Major price segments: Q-on-Q trend]


Premium and luxury segments have seen the most price volatility
l

Localities have been clubbed together into


price segments basis capital value
(Rs/sq ft) at the end of Jul-Sep 2015
quarter. We then track price changes in
them over a 2-year period

Capital values for each price segment is a


weighted average value of prices
prevalent in different localities in this
segment
The luxury segment has seen maximum

volatility and also the most appreciation


over the study period
l

The budget and mid segment has


remained stable and have seen minimum
movement in capital values

VOL5, ISSUE 2; JUL-SEP, FY 2015-16

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CHENNAI

[Major price segments - price increment]


Budget and mid-segments have remained flat

transaction activity in the market because


of which prices have remained flat over
the last two years.
l

the last two year period. In comparison,


the dominant affordable to mid-segment
(Rs 3,0004,999 per sq ft) saw an average
appreciation of only 4.7% in capital values

The graph shows the increment in


weighted average capital value in each
price segment over a two year period from
Jul-Sep 2013 to Jul-Sep 2015
As can be seen, the luxury segment has
seen maximum price appreciation over

The minimal movement in the lower


budget segments is indicative of very less

The adjacent heat map shows the localities in different


colour shades depending upon the prevalent capital
values (Rs/sq ft) in the locality. A bright coloured locality
indicates higher capital value while one with lesser shade
indicates relatively lower capital value
Flanked by the sea on its east, the city has evolved in an
180-degree arc along the west, north and south. The
expensive localities are in the center and suburban areas
around it. Peripheral areas have options in the budget to
mid-segments. Suburban and peripheral localities like
Velachery, Porur, Adyar, Medavakkam, Madipakkam and
Chromepet are some of the preferred localities
Localities in premium and luxury budgets are situated in
the center of the cities and expensive suburban localities
adjacent to them. These are already developed and have
limited land supply. Lack of fresh development in these
localities tend to make them expensive and still manage
to generate demand. Riding on aspirational value, prices
have a tendency to go beyond the median, which
negatively impacts the project and price appreciation
Most of the new supply is in the budget to mid-segments
across multiple localities in both suburban and peripheral
areas. A drastic drop in transaction has meant that there
is large stock of unsold inventory. Consequently, the
prices in this segment have remained flat

When this price appreciation is adjusted


for inflation in the study period, the price
appreciation turns out to be negative
The premium bracket of Rs 5,000-9,999
per sq ft range is the worst performing
segment in the market. On an average,
this price range saw an increment of only
2% during the study period with
constituent Rs 8,0009,999 segment
actually witnessing a decline of 0.3% in
capital values
While the luxury segment has seen a price
appreciation within 10% to 15% range, in
real terms, this price movement is
negative to barely positive

CHENNAI

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08

VOL5, ISSUE 2; JUL-SEP, FY 2015-16

[City - weighted average price trend]


City has witnessed marginal price movement

The graphs show the movement in


weighted average price which considers
the price points across all segments. While
the first graph shows Y-on-Y movement in
weighted average price, the second one
gives Q-o-Q movement of the same
The weighted average price increased by
9.7% over the last two year period.

However, the price increment over the last


one year was negligible at 0.1%,
indicating stagnant prices
l

After growing by 11.3% over Oct-Dec


2014 to Jul-Sep 2013 period, the price
declined by 4% to Rs 5,795 per sq ft next
quarter. From there, the price recovered
by 3% to reach the present level

Considering average annual inflation rate


of over 8% in the last three years, a
miniscule increase was seen over 20132015 period. Maximum contribution to
price increase was in the luxury segment
Flat capital values and incentives by
developers are leading to some traction in
the realty market

[PRICE MOVEMENT - KEY LOCALITIES]


[Segment 1: Rs 12,000 per sq ft & above]
Most expensive segment sees highest price increment
l

The localities in this segment have witnessed a weighted average


price of 14.6% over the last two year period. This is the highest
increment amongst all segments. These are old and established
prime areas of Chennai and continue to remain in demand by the
local population
Apart from secondary sales of independent houses, another main
reason for the price increase in these localities, even in this market,
is the limited new supply
The density of development in these areas is high and land for new
projects is very limited. Even when such projects do come up, the
scale of project and the number of units is much smaller compared
to the suburban and peripheral areas

VOL5, ISSUE 2; JUL-SEP, FY 2015-16

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CHENNAI

[Segment 2: Rs 10,000 Rs 12,000 per sq ft]


Premium segment witnesses second highest price appreciation
l

This segment witnessed 9.2% increment in weighted average price


over the last two years. This was the second highest price increment
amongst the eight budget segments in the Chennai market
Some of these localities are extension of localities in the center of
the city while others are prime suburban areas adjacent to the core
areas. Either ways, these localities have benefited from their
location as they were able to capture fresh demand which could not
be accommodated in the core localities
On an average, individual localities witnessed a 5% increment in
values. While some like Thiruvanmiyur and Kilpauk saw 12%
increase, others like T Nagar saw a decline of 10% in capital values
during this quarter

[Segment 3: Rs 8,000 Rs 9,999 per sq ft]


Only segment with decrease in price level
l

Localities in this range in the city are again some of the old and
established residential areas of Chennai. These localities are
enmeshed with premier residential areas in the Rs 10,00012,000
per sq ft range
This is the only segment in Chennai to witness a net decrease in the
weighted price of 0.3% over the last two year period. Analysis of this
two year trend shows that this segment has also seen considerable
volatility with a series of price increases and decreases
The price has fallen by an average 6.4% over the last two quarters.
At individual locality level, while some like West Mambalam and
Adyar witnessed 18%-29% price decrease, others like Saligraman
and Vadapalani saw increase in the 15%-20% range

[Segment 4: Rs 5,000 Rs 7,999 per sq ft ]


Second largest price segment sees miniscule price increase
l

This is the second largest individual price segment in Chennai with


19% of total active listings in the Chennai real estate market. A total
of 30 major localities fall in this budget segment and are spread
across a 180 degree arc from north to south
These localities represent the phase of growth when large scale
residential development started taking place in the city. Today, these
have evolved into established suburban areas commanding
premium prices. Velachery in this segment is the most preferred
locality by consumers in Chennai
In terms of price movement, the segment saw a miniscule increase
of 4% over the last two years. Only Perungudi witnessed a double
digit growth while others saw negative to marginal price increase

CHENNAI

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VOL5, ISSUE 2; JUL-SEP, FY 2015-16

[Segment 5: Rs 4,500 Rs 4,999 per sq ft]


Largest price segment see single digit growth
l

This is the largest price segment in Chennai and accounts for more
than 23% active listings in the market. There are 19 major localities
in this segment and these form the next ring of suburban areas after
the localities covered in the previous budget bracket
Localities in this segment like Porur, Madipakkam and Chromepet
are amongst the top 10 most preferred localities by consumers in
Chennai. Overall, the segment saw a marginal weighted average
price increase of only 6.2% over the evaluation period; individual
locality average increment was 7.4%
Most localities witnessed a single digit growth with only few
managing a growth beyond 10%. Being the biggest supply base,
this segment suffered from over-supply and low transaction volume

[Segment 6: Rs 4,000 Rs 4,499 per sq ft]


Prices in major peripheral localities remain stagnant
l

There are 17 major localities in Chennai with prices in this budget


range. Perumbakkam in South Chennai is the biggest market in this
price bracket accounting for 14% of the supply, followed by
Ambattur in West Chennai with an 11% share
Overall, the weighted average price of the localities in this range
exhibited only 4.2% increase over the last two years with an average
increase per locality being 7.3%. These localities constitute the start
of peripheral area of development in Chennai and come after the
more established suburban areas covered in the previous category
These localities have also witnessed tremendous growth as the city
evolved and developed radially along a 180 arc from the north to
the south of Chennai

[Segment 7: Rs 3,500 Rs 3,999 per sq ft]


Limited price increment
l

This is also one of the biggest price segments in Chennai and


accounts for 12.5% of the market share. More than 21 localities,
primarily in the peripheral areas of the city, fall under this segment
The growth has channelled into these localities along the major
roads radiating out of Chennai, primarily in the South and the
South-West direction. Major localities in this segment are Padur,
Urapakkam, Vandalur and Tambram (West)
In line with the trend in the affordable housing segment, this
category also saw a price increase of only 6.3% over a two year
period. Only a few localities witnessed growth beyond 10%, rest all
have a single digit growth which averages around 7% over the
evaluation period

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CHENNAI

[Segment 8: Rs 3,000 Rs 3,499 per sq ft]


Lowest budget segment sees lowest price increment
l

These are the farthest lying localities where new development has
reached over the last few years. Most of them are located further
along the main road(s) from major peripheral localities
Amongst the seven segments with positive price increment, this
range saw the minimum price increment of only 2.3% over the last
two years. While Oragadam in North-East Chennai saw maximum
price increase of 11%, Avadi in East Chennai witnessed a 10% drop
in prices. Other localities have a mix of price increase and decrease
This segment has seen minor price variations, positive and negative,
over the last two years. But overall, it has remained stagnant. It will
take quite some time for the transactions to reach a level where
there can be marked difference in price, even with low starting base

[Price increment: top & bottom five localities


Premium localities with limited supply see increase in price

l
l

The graph shows localities with maximum price increase over the
last two year period
Localities like Nungambakkam and Egmore which are close to the
city center witnessed the maximum price increment. Whereas, the
former saw a 26% increase in prices, the latter was 23%
Other three localities in the list are situated in the prime suburban
areas within a price range of Rs 5,000-9,999 per sq ft. Dominance of
this list by the premium and luxury segments highlights the low
transaction volume in the much large budget to mid-segment,
which led to stagnant prices in most of the localities in that range

l
l

The graph shows localities with minimum increment/maximum


drop in prices over the previous two year period
All localities featured on this list are in the suburban and extended
suburban areas. The prices vary from low Rs 3,915 per sq ft (Padur)
to high Rs 6,350 per sq ft (Valasaravakkam). These areas are affected
by the slowdown leading to rising inventory and stagnant prices
While localities like Thoraipakkam and Porur saw a decline in prices,
others like Padur and Valasaravakkam saw about 1% rise. Prices are
expected to be at this level until the market sees positive movement
in terms of transaction volume

CHENNAI

propindex.magicbricks.com

LISTED PRICE MONITOR

12

VOL5, ISSUE 2; JUL-SEP, FY 2015-16

RENT MONITOR

-5%
l

Saligramam and OMR saw the highest appreciation with 8% and


4%, respectively. Increase in residential property in and around OMR
has led to the increase in demand and hence property values too
Saligramam, in West Chennai, is a well developed locality,
surrounded by established localities like Vadapalani in the East,
Virugambakkam in the West, KK Nagar in the South and Koyambedu
in the North. The locality is poised to offer new stock, which along
with connectivity and location advantage ensures a rise in values
Pallavaram saw a rise of 2% in capital values whereas majority of the
localities did not perform. Pallavaram has good connectivity to the IT
corridors of Thoraipakkam and Shollinganallur, which has pushed
demand for residential properties resulting in escalating land prices

l
l

Nungambakkam and Adyar are localities leading the rental


appreciation chart in the city
Nungambakkam houses various government offices, commercial
hubs, premium hotels, educational institutions and sports centres.
Being an important part of the Central Business District (CBD) many
professionals flock here, increasing rental demand and values
Adyar, on the other hand, witnesses continuous demand for rental
accommodation from the locals and IT professionals due to its
proximity to the IT corridors along the OMR
Localities such as T-Nagar (-3%), Thoraipakkam (-3%),
Thiruvanmiyur (-2%), Kilpauk (-1%) and Perungudi (-2%) witnessed
least rental appreciation

YIELD METER
Locality

Velachery

OMR

Porur

Pallikaranai

Madipakkam

Medavakkam

Perumbakkam is benefitted the most from the fast-developing IT


corridor in OMR owing to its proximity with the same and other IT
hubs such as Medavakkam, Velachery and Sembakkam

11.25

12.75
12.75

11.25

11.25

6,725

4,080

4,835

4,815

4,835

4,585

21.25

10,945

Perumbakkam

11.00

4,065

Ambattur

OMR recorded the highest gross yield at 3.31%, followed by


Urapakkam at 3.27%. The OMR is witness to residential
development, attracting home buyers and also companies

17.00

Average Capital
Value (Rs/sqft)

Anna Nagar

Urapakkam

Average Rental
Value (Rs/sqft/mth)

10.00
10.25

Gross
Yield

3.03%

3.31%

3.16%

3.18%

2.79%

2.94%

2.33%

3,665

3.27%

4,110

2.99%

3.25%

Perumbakkam, Pallikaranai and Porur clocked gross yield of


3.25%, 3.18% and 3.16%, respectively
Pallikaranai, a suburb of South Chennai, offers job opportunities,
physical infrastructure, proximity to premium office spaces, easy
connectivity and planned development making it ideal
destination for investment

VOL5, ISSUE 2; JUL-SEP, FY 2015-16

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CHENNAI

CHENNAI

Capital Values Locality Wise


Average Listed Residential Apartment Prices
Locality

Capital Values
(Rs/Sq feet)

Adambakkam

6060 to 7300

Adyar

8260 to 11450

Alwarpet

15430 to 20820

Ambattur

3820 to 4630

Locality

Capital Values
(Rs/Sq feet)

Navalur

3900 to 4960

Nolambur

5490 to 6360

Nungambakkam

12720 to 17000

Okkiyam Thuraipakkam

5350 to 6280

9880 to 12870

OMR

3720 to 4730

Anna Nagar West

7690 to 9950

Padur

3690 to 4320

Arumbakkam

7910 to 9970

Pallavaram

4560 to 5740

Avadi

3120 to 3720

Pallikaranai

4540 to 5310

Ayanambakkam

4330 to 5320

Pammal

3800 to 4640

Perambur

5510 to 6660

4450 to 5470

Perumbakkam

3810 to 4530

13820 to 17520

Perungalathur

3740 to 4630

Anna Nagar

Besant Nagar
Chromepet
Egmore

12950 to 16700

GST Road

3630 to 4420

Perungudi

6010 to 7180

Guduvancheri

3090 to 3680

Poonamalle

3500 to 4140

Iyyappanthangal

3960 to 4650

Porur

4340 to 5730

Kattupakkam

4090 to 4840

Raja Annamalai Puram

Keelkattalai

4810 to 5570

Rajakilpakkam

4300 to 5060

Kelambakkam

3300 to 3850

S Kolathur

4260 to 5000

Saligramam

7420 to 9460

Selaiyur

4240 to 5100

Kilpauk
Kodambakkam

10240 to 13530
7610 to 10500

15580 to 21710

Kolapakkam

4200 to 4760

Sholinganallur

4480 to 5550

Kolathur

4510 to 5780

Siruseri

3550 to 4240

Korattur

5100 to 6820

T Nagar

10150 to 13450

Kotturpuram

12420 to 15040

Tambaram

3920 to 4610

Kovilambakkam

4220 to 4940

Tambaram East

4290 to 5160

Kovur

3880 to 4740

Tambaram West

3660 to 4350

Kundrathur

3240 to 3900

Thiruporur

3080 to 3760

Madambakkam

3800 to 4560

Thiruvanmiyur

9470 to 12700

Madipakkam

4520 to 5400

Thoraipakkam

5170 to 6160

Mambalam West

7660 to 9680

Urapakkam

3390 to 4160

Manapakkam

4860 to 5980

Valasaravakkam

5840 to 7260

Medavakkam

4270 to 5150

Vandalur

3390 to 3930

Mogappair

5530 to 6960

Velachery

6100 to 7850

Mogappair West

5360 to 6620

Villivakkam

4850 to 6190

Virugambakkam

6200 to 7880

Zamin Pallavaram

4580 to 5230

Mylapore

11270 to 15540

Nanganallur

5550 to 7020

Nanmangalam

3970 to 4760

N OTES

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VOL5, ISSUE 2; JUL-SEP, FY 2015-16

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Content & Research:


E Jayashree Kurup, Dipti Tandon, Subodh Kumar,
Rohit Vats, Bhawna Mongia, Devendra Lohmor,
Namrata Ekka, Preeti Sharma, Renu Arya,
Pushpa Rawat, Surbhi Gupta, Namrata Hazarika,
Puneet Kukreja & Bikash Kumar
Layout Design:
Harsha Khattar

D I S C L A I M E R
Every effort has been made to make this Index as complete and as accurate as possible. MagicBricks accepts no responsibility for inaccuracies in
the information/data contained in this book. It shall have neither liability nor responsibility to any person or entity with respect to any loss or
damage caused, or alleged to have been caused, directly or indirectly, by the information contained in this book. The information/data in this
book is subject to change from time to time due to market condition.