Real Estate Bull Run: New Launches, GCC Rush, Suburbs And More — What's Fueling Sales In Chennai
Chennai's supply addition has just started to pick up with the market moving towards luxury.
The real estate boom seen since the pandemic has moderated in almost all top cities albeit one exception — Chennai. Almost all other top cities saw their sales fall on an annual basis as of the second quarter of 2025, with only Chennai registering a double-digit growth at 11%.
The key behind Chennai’s unabated bull run can be best explained by supply, as much as sales. As sales started picking up, all other top cities saw extensive supply come, but not in the case of Chennai. In fact, it’s only just started to pick up.
Late To Supply-Side Party
Real estate experts point out that the real estate bull run started a tad late in Chennai, unlike in the top eight and hence, the continued growth.
"Data trends indicate restricted new supply in the city over the last few years, which, in a way, is a major factor driving growth now due to rising demand," explains Anuj Puri, chairperson of real estate consultancy Anarock Group. "Chennai saw a new supply of merely 45,830 units in 2023, 2024 and Q1 2025 combined, while other southern cities, including Hyderabad and Bengaluru, added nearly 1.45 lakh units and over 1.46 lakh units respectively in the same period."
In Q2 of 2024, as many as 8,525 units have been added, which is the highest in a decade. The last time the city saw a surge in new supply was way back in Q1 of 2015, when the city added a tad over 10,000 units.
There are other trends that are playing out in a delayed manner too. While premium and ultra-premium home sales have been zooming in other cities, the Chennai market is still dominated by affordable homes.
Mid-segment properties — those priced between Rs 40–80 lakh — comprise 41% share of the total units launched in Q2 2025. This is followed by 38% share of premium homes priced between Rs 80 lakh and Rs 1.5 crore. Luxury and ultra luxury properties priced over Rs 1.5 crore comprises 21% share. In the second quarter of 2025, affordable homes saw no launches with the most being dominated by others, showing that the supply side is catching up with the changing tastes of homeowners too.
"While the majority of the residential activity is in mid or luxury housing segments, the city is seeing a notable traction of ultra-luxury housing segments amidst rising developer focus towards premium offerings and improvements in purchasing power of homebuyers. Micro markets near key IT hubs are getting skewed towards high-end premium housing activities driven by improving developer and investor confidence in these areas," said Vimal Nadar, national director and head of research at Colliers India.
Unlike other cities, the price growth in Chennai has been slow too. As per Anarock Research, average residential prices in Chennai stood approximately at Rs 6,500 per sq. ft. in Q2 2024, which have increased to approximately Rs 6,950 per sq. ft. as of Q2 2025, thereby registering a 7% yearly jump.
“In comparison to other major metros, Chennai’s price growth has been lower than most top cities except Pune where the yearly growth stood at 6%. All other cities recorded higher growth in average residential prices,” says Puri.
The Great GCC Rush & More
Latent demand is, however, not the only factor that's influencing the rush for sales. The commercial real estate sector of Chennai has been surging, thanks to the Global Capability Centres rush. The city is known to have around 300 GCCs already, and as per CBRE's projects, it can go as high as 450 by 2030.
As per Anarock Research, GCCs leased about a total of 5.29 mn sq. ft. of gross office space in the city in the last two years. Of this, approx. 2 mn sq. ft. was leased in 2023, while nearly 3.29 mn sq. ft. was leased in 2024, thereby seeing a 64% annual rise.
As per Colliers' data, the momentum has been going through in 2025 as well. In the first half of 2025, the city saw a 57% and 67% annual rise in leasing activity and new office completions respectively.
While GCCs are key to growth, they are not the only sector that’s pushing up commercial activity. The city is an auto component hub and is the hotbed for many other sectors in addition to a bustling IT industry and a supply of talent.
“Additionally, the city’s industrial and warehousing activity has picked up pace driven by engineering, automobile and third-party logistics players," says Nadar.
Its commercial leasing activity in the city has been buzzing — with a spillover effect on the need for newer and larger homes.
The Rise Of New Suburbs
The city, like most others, has been seeing a rise in new suburbs due to improved connectivity. Apart from improving metro connectivity, the upcoming Chennai-Bengaluru Industrial corridor, upcoming Chennai Peripheral Ring Road etc. are enhancing connectivity of the city.
The West and the South regions witnessed maximum real estate activity in Q1 2025, which includes localities such as Pallavaram, Medavakkam, Kanathur, Iyyappanthangal, and Siruseri.
Coastal Chengalpattu and South Tambaram micro markets are seeing good traction; along with West Poonamallee and North Ambattur micro markets, led by proximity to employment hubs, such as Old Mahabalipuram Road stretch, Mount Poonamallee High Road regions.
“The presence of robust social infrastructure, connectivity and proximity to established IT corridors in these micro markets have elevated demand for mid and luxury housing options, including demand for premium gated communities, especially in areas such as Velachery, Sholinganallur, Porur, OMR, etc. Growing convergence of sustainable and smart homes has also brought in increased interest from high-net worth individuals and NRIs towards city’s premium developments,” adds Nadar.
Experts also say that localities near traditional industrial clusters, such as Guindy and North Ambattur, are also seeing substantial uptick, but in affordable and mid-level housing options. Projects like Metro Phase II are set to further boost real estate activity especially in Central and Southern micro markets of the city.
With modern supply, new suburbs and a fresh surge in commercial activity, Chennai is at the confluence of many factors that would make it a fast-moving hub — ahead of its southern cousin Hyderabad and other IT hubs like Bengaluru and Pune. All these three cities saw their supply as well as sales fall in the second quarter of the year. Unlike these cities, Chennai real estate has a lot more juice left it in for buyers as well as developers.
Katya Naidu is a senior business journalist who writes about equity markets, startups, energy, infrastructure, real estate and healthcare.
