Property prices in  have been on a high rise over the last few years and after the global economic recession and the financial credit crunch, prices appear to stabilize for now. Commercial rentals have plummeted to some extent. Just a few months earlier, Property prices in Chennai, saw an increase of about 8 to 12 % in the last 3 years.

Construction costs in Chennai, India has seen a massive increase in the last few years. High Steel and timber prices along with rising labor costs resulted in extra ordinary building costs - almost as high as Rs.3500 per square feet for some gated communities type of residences. After the economic meltdown, steel prices appear to come down. But as of now - situation is still nebulous. Many real estate developers have to tide over the financial crunch and as a result, some even offer affordable flats at less than Rs.1500 per sq.ft. With many companies giving pink slips, and the world wide economic slump will have a cascading effect on real estate prices too.

Prices for property in Chennai have now fallen to a fair value, based on rents, interest rates and other costs.  This is the first time in the last three years, that real estate in Chennai has been below a reasonable price.

The IT and BPO industries are an important reason for this boom in the real estate market of Chennai. Not only has it increased the capital and rental values of commercial and residential properties, it has further fuelled a demand for housing for its workforce. The IT corridor along Old Mahabalipuram Road is seeing a facelift. A six-lane highway stretching 20 kms is home to many MNCs who are setting up operations here. This has pushed property prices in this area of Chennai sky high. Typical prices in Sholinganallur are in excess of Rs 2.5 crores an acre.

The Tamil Nadu Government has also announced the setting up a marine biotechnology centre near Mahabalipuram. But OMR is still facing problems of supporting infrastructure; such as adequate transport facilities. But this issue will change once the Siruseri IT Expressway is completed. The bottleneck of traffic from Madya Kailash on the way to Taramani via Tidal Park is likely to reduce after this section is finally completed.

Property prices have already skyrocketed in the ECR (East Coast Road) almost upto a few kilometers short of Pondicherry. This tips the scale in favor or older industrial estates. Land prices in the industrial areas of Guindy and Ambattur are also seeing climbing rates. A ground costs anywhere between Rs. 40 - 50 lakhs in Guindy. The relaxation in FDI rules are estimated to propel the property market and see the growth of mega townships.

Some Builders have entered into joint ventures to promote housing apartments. The apartment sales have increased in volume. The city's landscape has been changing with many an independent house giving way to apartment and high rise buildings.

Residential property prices in Chennai have also seen an upswing due to increased demand for premium housing apartments as well as low cost budget flats. The property market in Chennai has been buoyant since 2004 Consequently rental prices have also shown an upswing. Certain suburbs are seeing increased real estate development activity.