Unsold luxury homes grow 10%, stock still a fraction of affordable: Anarock

Affordable homes make up 36% of the unsold housing stock, while luxury segment's shares is 14%

The unsold stock of properties in the luxury housing segment, priced at over Rs 1.5 crore each, has increased by 10 per cent in the top seven cities in 2019 over the previous year, even though the share of the segment in the overall unsold housing stock was lower than that of affordable homes. Affordable homes comprised around 36 per cent of the unsold housing stock, while the luxury segment's share was less than 14 per cent, according to Anarock Property Consultants.

Unsold inventory in mid-segment homes (price: Rs 40-80 lakh) diminished by as much as 15 per cent in 2019, from nearly 227,000 units in 2018 to about 202,000 units in 2019. This was the highest contraction across segments. 

There were 89,200 luxury homes lying unsold by the end of 2019 as against 81,290 such dwellings in 2018. Overall unsold housing stock across different budget segments stood at 648,000 units in the top seven cities by 2019-end, declining by mere four per cent since 2018. 

"Snapped up like hot cakes by investors in previous years, luxury housing sales are still in the doldrums and hinging largely on end-user sales. Even after three years of demonetisation, despite having the lowest share of overall unsold stock in the top-7 cities, it remains the worst-performing of all budget categories," said Anuj Puri, chairman, Anarock Property Consultants. Luxury developers have severely curtailed the supply pipeline, primarily due to the absence of investors in this segment.

Among the cities, Kolkata saw a 10 per cent decline in unsold luxury stock, from 2,265 units in 2018 to around 2,050 units in 2019. Mumbai Metropolitain Region (MMR) has seen a two per cent year-on-year increase, from 48,040 units in 2018 to 48,970 units in 2019. Hyderabad and Pune saw the highest increase in unsold luxury stock, at 58 per cent and 56 per cent respectively. Hyderabad's pent-up luxury stock rose from 3,000 units in 2018 to nearly 4,740 units in 2019; while in Pune, it increased from 2,750 units to 4,290 units during the period.

NCR saw its unsold luxury stock increase by 17 per cent in the period by around 18,400 units in 2019. In Chennai, unsold luxury stock increased by 33 per cent in a year – from 2,480 units in 2018 to nearly 3,300 units by 2019-end. Bengaluru’s unsold luxury stock grew by six per cent, from 7,010 units in 2018 to 7,470 units in 2019.

Of the total current unsold stock of nearly 648,400 units in the top seven cities, affordable housing (priced below Rs 40 lakh) comprised the maximum share at about 36 per cent, followed by 31 per cent in the mid-segment (Rs 40-80 lakh), while the share of unsold premium homes priced between Rs 80 lakh and Rs 1.5 Cr was 19 per cent.

Bengaluru and Hyderabad saw the maximum yearly stock decline of 37 per cent and 34 per cent respectively. With the highest new supply in 2019, affordable homes saw unsold stock reduce by a marginal one per cent, from 238,750 units in 2018 to 236,640 units in 2019. Hyderabad, Kolkata, Chennai and NCR shed maximum unsold affordable stock, by 28 per cent, 11 per cent, 10 per cent and 9 per cent respectively. Unsold stock of premium homes priced from Rs 80 lakh to Rs 1.5 crore rose by four per cent to 120,900 units as on 2019-end.