The trend in realty sector is not as it used to be in the year 2010. As a result, there have been many backlogs in sale of luxury apartments and villas. People have started looking into more compact and affordable houses that can fit within their budgets. The builders in the city have very well understood this fact and hence, many upcoming projects in Chennai are compact houses in order to cater to the needs of such people.
To boost the sluggish realty market and fuel housing demand, developers across the country have been launching projects with small unit sizes (800-1,200 Sq. ft.). As land prices are high in the cities, homebuyers are opting for small, compact homes at reasonable prices. Chennai’s residential market is dominated by end-users with little presence of investors, resulting in lower price volatility compared to Mumbai, Delhi, NCR and Bangalore. The demand for compact homes is gaining momentum and most developers launch such projects in central parts of the city due to constraints in acquiring large land parcels.
While the non-availability of land and the high costs are driving the demand for compact homes, another major reason for the trend is the conscious effort by developers to create affordable projects for middle and lower middle income groups. In Chennai, the trend is common in areas such as Perumbakkam, Porur, Mogappair and Medavakkam. Developers and end-users find the South and West Chennai housing market appealing due to more vacant land, affordable prices, and proximity to central Chennai and employment hubs. Another attractive reason may also be because most investments are funded by home loans - smaller apartments mean that EMI outflows are manageable.
