Chennai Real Estate Market Sees 6% Rise in Property Prices

Residential property prices across India increased by 6% year-on-year in the first quarter of FY27, with Chennai emerging as one of the key markets contributing to the growth, according to a report by Kotak Institutional Equities.

The rise in property prices helped lift the overall value of residential sales despite relatively moderate growth in sales volumes. Residential sales value increased 9% YoY during the quarter, supported by a 6% rise in prices and 3% growth in volumes.

Average residential real estate realisation reached Rs 9,629 per sq ft, marking a 6% annual increase, though it declined 2% compared with the previous quarter.

Across India, residential sales stood at 247 million sq ft during Q1 FY27, up 3% from the same period last year but down 3% sequentially.

Chennai Among Key Growth Markets

Chennai was among the major markets identified by the report, along with New Delhi, Noida, Greater Noida and Bengaluru, as contributing significantly to the increase in residential property prices.

The performance highlights the continued importance of price appreciation in India`s housing market. However, the report noted that overall industry growth in recent years has been driven more by rising prices than by a sustained increase in sales volumes.

New Housing Supply Declines

The quarter also witnessed a significant slowdown in new residential project launches. New supply fell 14% year-on-year and 16% sequentially to around 242 million sq ft.

The National Capital Region recorded the sharpest decline in sales, with residential transactions falling 27% YoY and 8% sequentially to 23.5 million sq ft.

Other major markets performed comparatively better. Mumbai Metropolitan Region recorded sales of 41.5 million sq ft, while Bengaluru registered 30.7 million sq ft. Hyderabad reported 34.3 million sq ft in sales, supported by 55.5 million sq ft of new launches.

Price Growth Remains a Key Driver

The report observed that the real estate industry`s growth over the past two years has largely been driven by property price appreciation, while sales volumes have remained broadly range-bound.

Unsold housing inventory also increased sequentially in Bengaluru, Hyderabad and the NCR, partly due to fresh project launches. Across India, unsold residential inventory stood at around 1.8 billion sq ft as of June 2026, equivalent to approximately 1.9 years of trailing 12-month sales.

For Chennai, the continued increase in property prices reflects the city`s position among India`s major residential markets. However, a sustained improvement in sales volumes will be important to determine whether the current growth trend reflects stronger underlying housing demand.