This is Chennai's IT hub, Old Mahabalipuram Road. It will also be the base from where real-estate developer DLF will give its competition a run for its money.

It has bought two 60-acre parcels of land on which it will develop between 4,000 and 4,500 residential units, including apartments, row houses and villas. Prices will start from Rs 2,700 a square foot. That's against a market price of Rs 3,500. Premium developers such as Purvankaras, The Mantri Group & The Hiranandani Group have priced their apartments at Rs 4,200 a square foot.

DLF officials say their prices are much lower because they want to capture the market. Market watchers say the only way other developers will survive is by lowering their prices as well. About 16.5 million square feet of residential space is under construction on Old Mahabalipuram Road and 12 million square feet will be launched in a year's time.

Property analysts say slowing demand and high prices make it difficult to sell property here. They say DLF's large supply is expected to hit the market in the next 18 to 24 months. They say that sounds like bad news for other developers unless prices fall to more rational levels.