Chennai’s residential real estate sector is poised for measured growth in FY2027, with sales projected to rise between 2% and 5% year-on-year. Analysts highlight that steady end-user demand, ongoing project launches, and increasing interest in luxury housing are supporting this momentum, signalling a stabilising urban market despite earlier volatility. The trend also reflects Chennai’s evolving housing preferences and the city’s growing infrastructure backbone.
Following a strong recovery post-pandemic, Chennai’s residential market recorded annual sales of approximately 16 million square feet in H1 FY2026, a 17% increase over the previous year. While growth is expected to moderate in FY2027, the base effect from robust prior years tempers concerns. Industry experts note that residential launches remain active, with developers balancing supply to maintain inventory comfort and avoid oversaturation. A key driver of Chennai’s moderate expansion is the sustained appetite for mid- to high-end housing. Luxury and premium segments have surged in recent years, with H1 FY2026 launches in the high-value bracket accounting for 42% of all new projects significantly higher than 19% in FY2025 and just 8% in FY2021.
Analysts attribute this shift to rising disposable incomes, urban lifestyle aspirations, and the city’s position as a growing employment hub with enhanced connectivity. Infrastructure upgrades across the city, including metro extensions and a city-wide drainage improvement programme, have reinforced the attractiveness of new residential projects. Urban planners suggest that such enhancements not only boost property value but also contribute to more sustainable and climate-resilient neighbourhoods by addressing flooding risks and improving urban mobility. Inventory conditions remain stable, with the years-to-sell (YTS) metric projected at 1.6-1.7 years by March 2027. This indicates a balanced market where developers can pace launches without exacerbating oversupply, providing confidence for both buyers and investors. Experts point out that comfortable inventory levels also enable responsible urban growth, mitigating the risks of speculative construction and financial stress.
Looking ahead, the Chennai residential market is expected to continue evolving, with luxury and premium housing maintaining strong traction while mid-income projects support steady volume growth. Urban planners and market observers emphasise that aligning new developments with sustainable infrastructure, community-oriented planning, and climate resilience will be critical to ensuring long-term urban stability and equitable access to housing.
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Chennai Residential Sales Forecast Moderate Growth FY27
