Housing sales rose by a whopping 71 per cent in two years to reach nearly 78,520 units in Q1 2019 compared to sales of merely 46,000 units recorded in Q1 2017 across the top 7 cities. As a result unsold inventory in Delhi-NCR, Mumbai Metropolitan Region (MMR), Bangalore, Hyderabad, Kolkata, Chennai and Pune declined from 50 months in Q1 2017 to 30 months this quarter.
According to ANAROCK Property Consultants’ most recent data, the cumulative unsold stocks of top 7 cities declined by 16 per cent in last 2 years and stands at 6.65 lakh units in Q1 2019. While unsold inventory in Delhi-NCR drops to 50 per cent – from 90 months in Q1 2017 to 45 months in Q1 2019, current levels of inventory in Bangalore and Hyderabad are at all-time low of 15 months each. Similarly, Pune’s unsold inventory stands at 28 months, followed by Chennai with 30 months, while MMR and Kolkata are at par with 35 months each.
As inventory measured in months indicates how many months it will take for the current unsold housing stock on the market to sell, at any given period, an inventory overhang of 18-24 months is considered fairly healthy.
“Average property prices across cities have largely maintained status quo and saw less than 2 per cent rise in the last two years – from Rs 5,480 per sq. ft. in Q1 2017 to Rs 5,570 per sq. ft. in Q1 2019. While the top 7 cities saw a cumulative drop of 16 per cent in overall unsold housing stock in the last two years, Bangalore saw the maximum decline. The city saw pent-up housing inventory reduce by a 44 per cent – from nearly 1,18700 units in Q1 2017 to 66,820 units in Q1 2019. Hyderabad followed with a 21 per cent decline in the same period,” says Anuj Puri, Chairman – ANAROCK Property Consultants.
Although, the current housing inventory level now stands at 6.65 lakh units across the top 7 cities – nowhere near the lowest level of 4.96 lakh units seen in 2013, but the extremely worrisome trend of rising inventory since 2014 onward has effectively been arrested, with data clearly suggesting a Q-o-Q unsold stock decline in the 7 main cities from Q1 2017 onward. ANAROCK believes a stable government at the Centre would boost buyer confidence further and increase housing sales velocity in the coming quarters.
As per the ANAROCK data, Delhi-NCR saw unsold stock decrease by a significant 18 per cent during this period, leaving the other ‘heavyweight’ market MMR far behind. MMR cleared a mere 4 per cent of its unsold inventory in the same period. In short, NCR has halved its unsold housing inventory overhang – from 90 months in Q1 2017 to 45 months in Q1 2019.
But the question is what makes Indian homebuyers’ gradual return to the market?
According to ANAROCK’s recent Consumer Sentiment Survey, over 60 per cent of prospective buyers plan to take the property plunge in 2019. Apart from favourable property prices, GST rate cuts and multiple sops for first-time and budget home buyers played key roles in this improvement.
So, it seems a good time to take advantage of favourable property prices and cuts in GST and home loan rates earlier this year to fulfill the dream of buying your sweet home.