In Chennai city, the search for home gets pricey

Time of India

2 days ago

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The rental squeeze is no longer just a core-city story. In Velachery, a modest 1BHK in an apartment complex with elevators and other amenities now rents for 22,000, nearly double what it cost two years ago.
In Sholinganallur, rents have crept past 30,000, and even suburbs like Pallavaram, Ambattur, and Perambur are no longer 'affordable'.
Be it the traditional hotspots like Adyar and Anna Nagar, or the growing suburbs like Pallavaram, Perungudi, and Madhavaram, rents are surging across Chennai. With school admissions underway and offices demanding in-person attendance, families and professionals alike are scrambling for homes, only to find landlords upping the stakes mainly due to an increase in land value, a spike in property tax, and improved connectivity.
"I moved into a 1BHK at T Nagar last year for a rent of 12,000. Since it is manageable, and close to work, I didn't mind the rent. A year later, my friend rented a house, and she is paying nearly 19,000 for a similar unit," explained Nisha Krishnan, who had moved to Chennai from Coimbatore.
According to real estate consultants, rents in Chennai increased by 20%–25% over the past two years. Some localities witnessed a jump of 30% or more.
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"Gated communities, in particular, are leading this surge, charging 7%–8% higher rents than standalone buildings," said Sanjay Chugh, city head, Chennai, Anarock Property Consultants.
He said Chennai recorded the steepest rental growth among major Indian metros in Q3 2024 — a 22.2% quarter-on-quarter rise in per sqft rental values. "A major contributor for the hike was slowdown in new construction activity, largely stemming from pandemic-related disruptions.
This limited supply, coupled with sustained demand, led to a sharp rise in rental prices. However, with fresh housing supply gradually entering the market, rental inflation has now eased to single digits after nearly three years of steep increases," said Saurabh Garg, co-founder and chief business officer of NoBroker.
Another key factor is the shift in workplace dynamics. "As companies scale back remote work policies, many professionals are returning to Chennai.
Furthermore, the city's emergence as a prominent hub for Global Capability Centres (GCCs) — with more than 250 centres employing more than 150,000 professionals — has significantly amplified the need for quality rental accommodations near these employment clusters," he added.
Premium areas like T Nagar, Adyar, and Besant Nagar remain in high demand, but suburban pockets are seeing the sharpest rental inflation.
In places like Pallavaram and Perambur, rents jumped 33%–40%. Along Old Mahabalipuram Road (OMR), Sholinganallur, and Velachery — where IT offices, coworking spaces, and colleges cluster — the rent for 1BHKs now ranges between 18,000–30,000. In Vadapalani, a 2BHK in the arterial area can cost upwards of 45,000.
What's more, furnished flats and short-term leases are gaining popularity, especially among landlords who want flexibility to adjust rents more frequently.
"There's high demand for move-in ready homes, and tenants are willing to pay a premium for convenience," said Giriraj, a broker based in T Nagar.
S N Srikanth, a member of Chennai Real Estate Agents Association, said there is still demand for rental houses in the core city due to the presence of schools and colleges, but the supply is not matching. "This is also triggering a spike in rent. Besides, property tax has been increased, and this has a cascading effect on the rents too," he said.
With rentals eating up a larger portion of monthly incomes, tenants are adapting. Many are moving further from the city centre in search of affordability. Students and single professionals increasingly prefer co-living or shared housing over hostels, expanding the tenant pool in places like Tambaram, Kolathur, and Chromepet. "Velachery has become a hub for co-living spaces. Apart from this, Pallavaram Radial Road, Pallavaram, and other suburban areas are also booming," said Suresh Rangarajan, founder of Coliv.