The unsold inventory in the residential real estate fell to 30 months of worth in the first quarter of calendar year 2019 as against 50 months in the corresponding period in 2017.
The unsold inventory in the residential real estate fell to 30 months of worth in the first quarter of calendar year 2019 as against 50 months in the corresponding period in 2017. In first quarter of 2018, the unsold inventory was 42 months of worth. This shows that the Indian homebuyers are taking advantage of favourable property prices and reduction in Goods and Service Tax (GST) and home loan rates, an Anarock report said.
An inventory overhang of 18 months to 24 months is considered healthy as it indicates that the current unsold housing stock can be sold within two years.
The average property prices have maintained a status quo and increased by less than 2% in past two years,whereas the sales jumped by 71% during the same period. In first quarter of 2019, average property price was `5,570 per sq ft as against Rs 5,480 per sq ft in first quarter of 2017. The sales in first quarter of 2019 reached 78,520 units, up from 46,000 units in first quarter of 2017.
Anuj Puri, chairman, Anarock Property Consultants, said that Bengaluru saw the maximum decline in the unsold housing units. “While the top seven cities saw a cumulative drop of 16% in overall unsold housing stock, Bengaluru saw pent-up housing inventory reduce by 44%. It went down from nearly 1,18,700 units in first quarter of 2017 to 66,820 units in first quarter of 2019. Hyderabad followed with a 21% decline in the same period,” he said.
However, the heavyweight market of Mumbai Metropolitan Region (MMR) cleared a mere 4% of unsold inventory between 2017 and 2019. Delhi National Capital Region (NCR) instead, saw a decline of 18% in these two years, to 45 months in first quarter of 2019.
The excessive supply in MMR, which had the maximum unsold stock in first quarter of 2017, at around 2,30,800 units, led to a slower reduction in overall unsold inventory. “The new launches were about 1,40,480 units in MMR, which was 34% of the total new supply in the market across top seven cities between first quarter of 2017 and first quarter of 2019,” Puri said.
The trend of rising inventory since 2014 has been arrested effectively. In the coming quarter, a stable government at the Centre will boost buyers’ confidence along with favourable property prices, GST rate cuts and multiple sops for first-time and budget homebuyers.