'Unsold housing stock falls 12 pc in last 5 yrs to 6.27 lakh units'

NEW DELHI: With a significant rise in housing sales post-COVID, real estate consultant Anarock has said unsold homes with developers across seven major cities fell 12 pc in the last five years, and time needed to clear these inventories have come down by half to just 20 months.

In its latest report, Anarock said unsold housing stocks have declined 12 per cent to 6,26,750 units at the end of January-March this year from 7,13,400 units as of March 31, 2018. More importantly, Anarock said, inventory overhang (estimated time developers need to clear unsold inventories at current sales velocity) fell to 20 months from 42 months at the end of March 2018.

An inventory overhang of 18-24 months is normally considered healthy. Anarock Chairman Anuj Puri attributed the drop in unsold stocks and inventory overhang to a surge in housing sales. In Q1 of 2023, the top 7 cities recorded all-time high sales of more than 1.14 lakh units.

''Strong home-ownership sentiment, relatively lower home loan rates, strong momentum in luxury housing, and the anticipation of further price hikes were major factors in boosting housing sales,'' Puri observed.

As per the data, Delhi-NCR remained the frontrunner in reducing overall inventory overhang in the last five years – from 66 months in Q1 2018 to 23 months in Q1 2023''.

During the last five years, in Mumbai Metropolitan Region (MMR), the inventory overhang has shrunk to 21 months from 55 months. Bengaluru currently has the lowest inventory overhang of 13 months. Hyderabad's inventory overhang was reduced to 21 months from 23 months. Pune builders will require 20 months to sell unsold stocks against 40 months five years ago.

Chennai too saw a drop in its inventory overhang to 20 months from 36 months. Kolkata's residential inventory overhang has dropped from 46 months in Q1 2018 to 20 months as of Q1 2023-end. Commenting on the drop in unsold stocks, Signature Global Chairman Pradeep Aggarwal said,

''About 7-8 years ago, there existed a mismatch between the demand and supply in the real estate industry prior to regulatory changes like RERA, GST, and IBC. However, since then, there has been a significant amount of consolidation, leaving only serious developers''.

''Thanks to the strong demand from end-use home buyers, there is now a healthy balance between the demand and supply in the industry. This balance is expected to continue and promote sustainable and robust growth in the market.''

Kunal Rishi, COO, Paras Buildtech, said it is no surprise that new project launches are projected to sell out faster, considering the robust demand. Post-COVID pandemic, Rishi said, individuals are increasingly recognising the importance of owning residential assets.