Chennai Rents Skyrocket, Push Tenants to City’s Edges

Chennai’s rental market is heating up fast and it’s not just central areas feeling the pressure. From T Nagar to Tambaram, soaring rents are making it harder for families, professionals, and students to find affordable housing.

In Velachery, a 1BHK in a gated apartment complex now commands ₹22,000, nearly double the rate from two years ago. Sholinganallur has crossed ₹30,000 for similar homes, while once-affordable suburbs like Pallavaram, Ambattur, and Perambur are no longer budget-friendly. Even in T Nagar, a 1BHK which was let out for ₹12,000 in the previous year is now priced at ₹19,000, say tenants.

Rental prices in Chennai have gone up by 20%-25% across the board since 2022, and in some areas, it has increased by 30% or more, say real estate consultants”Gated communities are leading the rise, charging 7-8% more than standalone buildings,” noted Sanjay Chugh, Chennai head at Anarock Property Consultants. Chennai posted the steepest rental growth among major Indian metros in Q3 2024, a 22.2% quarter-on-quarter rise in per-square-foot rates.

The spike is driven by a mix of factors: school admissions, office reopenings, and a post-pandemic supply crunch. “New construction slowed during COVID, leading to limited rental stock. While supply is now improving, rents have already climbed steeply,” said Saurabh Garg, co-founder of NoBroker.

Chennai’s rising prominence as a Global Capability Centre (GCC) hub has further intensified demand. Over 250 GCCs now operate in the city, employing more than 1.5 lakh professionals.

While premium localities like Adyar and Besant Nagar remain hot markets, the sharpest increases are seen in OMR, Velachery, and Vadapalani where 2BHKs can cost over ₹45,000. In Perambur and Pallavaram, rents have jumped 33%-40%.

With affordability shrinking, tenants are seeking alternatives. Co-living spaces and shared accommodations are gaining traction in areas like Kolathur, Chromepet, and Tambaram. “There’s growing interest in fully furnished, move-in ready rentals tenants are willing to pay more for flexibility,” said broker Giriraj of T Nagar.

Landlords cite rising property taxes and land values as reasons for rent hikes. “Supply hasn’t caught up, especially in core city zones near schools and colleges,” said S.N. Srikanth, Chennai Real Estate Agents Association.

As rents continue to climb, Chennai’s housing crunch is rapidly expanding from the core to the city’s outskirts.