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NCR unsold residential stock falls 12% y-o-y; highest compared to cities in West & South

A market which was infamous for having the highest unsold stock of residential units in the country before the pandemic, has seen a fall of 12% during January-March 2022, compared to two years ago.

NCR unsold residential stock
According to the findings by ANAROCK, NCR’s unsold inventory declined from about 1.73 lakh units by at the end of March 2020 to nearly 1.53 lakh units by the end of March 2022. (Representational image)

The residential market in the National Capital Region (NCR) seems to have started seeing signs of a turnaround. The combined stock of unsold residential units in five micro-markets of the region have seen a sharp fall in the last two years when compared to its peer markets in the western and southern India.

A market which was infamous for having the highest unsold stock of residential units in the country before the pandemic, has seen a fall of 12% during January-March 2022, compared to two years ago. In comparison, unsold stock in western India markets declined by 10%, while southern market have actually seen a sharp rise in unsold units of 32% in the first three months of the year versus the same period in 2020. The micro-markets in NCR include Gurugram, Noida, Greater Noida, Ghaziabad and Faridabad.

According to the findings by ANAROCK, NCR’s unsold inventory declined from about 1.73 lakh units by at the end of March 2020 to nearly 1.53 lakh units by the end of March 2022. This is the sharpest decline witnessed by the market in a long time.

The development bears significance because the decline in unsold stock has happened despite a sharp increase in new residential project launches in the last two years. This means that the market is back to seeing good sales momentum, and is setting on a recovery path after remaining mired in a lot of issues around delayed project deliveries, financial irregularities, lack of end users and sales being driven by investors leading to emergence of ‘ghost townships’ in most parts of NCR. In addition, disruptive policy interventions like demonetisation, RERA, and GST also added to developer woes. However, the post-Covid period saw a notable shift, with Delhi-NCR outpacing its southern and western counterparts, ANAROCK said.

NCR outstripped both the southern and western markets in supply additions with a massive three-fold rise in new launches in Q1 2022 compared to Q1 2020 – from 6,190 units in Q1 2020 to about 18,840 units in Q1 2022.

In comparison, cities in the south of India — Bengaluru, Hyderabad and Chennai saw their collective unsold stock increase by 32% in the same period, and MMR (Mumbai Metropolitan Region) and Pune in the west saw a collective decline of 10% in the same period.

The main southern cities saw their unsold stock increase from about 1.21 lakh units in Q1 2020 to over 1.60 lakh units in Q1 2022. However, this rise in unsold inventory was primarily because of a massive new launch rate in Hyderabad. In MMR and Pune, the unsold stock declined between the pre and post-pandemic periods from nearly 3.07 lakh units by Q1 2020 to 2.75 lakh units at the end of March 2022.

Santhosh Kumar, vice chairman, ANAROCK Group, said, “We attribute NCR’s significantly upbeat performance to returning consumer confidence, prompted by the fact that several leading and listed players have amplified their supply pipeline in the region. With a sharp increase in new launches NCR has resoundingly broken its previous trend of restricted new supply. Remarkably, despite this massive new supply, the region’s unsold stock saw the steepest reduction among all other regions.”

Collectively, the southern cities saw around 37,810 new homes launched in Q1 2022 – a 142% increase against the 15,650 units in Q1 2020, while the western cities witnessed a 109% jump – from 18,270 units in Q1 2020 to approx. 38,130 units in Q1 2022.

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