 "Top Indian cities report about 1 million unsold housing units: Study")
The top eight Indian cities have reported high inventory levels, with about 1 million unsold housing units at the end of the third quarter of the calendar year 2024 (Q3 2024), as per Liases Foras and Colliers.
The top eight cities are the Mumbai Metropolitan Region (MMR), Delhi National Capital Region (NCR), Bengaluru, Chennai, Hyderabad, Kolkata, Ahmedabad, and Pune.
Explaining the reasons behind the high inventory levels, Vimal Nadar, senior director and head of research, Colliers India, said, “The residential market across major cities of the country has been registering record-high sales in the last two years. Developers, optimistic about continued high traction in demand, have been launching new projects across affordable, mid, luxury, and ultra-luxury segments.”
As per Anarock, in 2023, the combined sales of the top seven cities reached 476,000 units, as against 364,000 lakh units in 2022, registering a yearly growth of 31 per cent.
Nadar stated that developers are being cautious with new launches amid high inventory levels. “Developers, too, have been recalibrating their strategies and carefully launching residential projects targeted specifically for an appropriate set of homebuyers,” he added.
In Q3 2024, as per Anarock, the new housing supply witnessed a 19 per cent year-on-year (Y-o-Y) drop, falling below the 100,000 mark for the first time since Q1 2023. During the quarter, the sales also declined 11 per cent Y-o-Y.
Pankaj Kapoor, managing director of Liases Foras, too, stated that a gradual reduction in new launches has been observed. However, he said that NCR, Chennai, and Tier-II cities have a deficient supply level, and they may see a surge in new launches. He noted that MMR, Pune, and Hyderabad “are reaching a plateau in sales and supply.”
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Further, of the total 1 million unsold units, affordable and middle-income categories cumulatively accounted for almost two-thirds of the unsold inventory. Justifying the trend, Nadar said, “Unsold inventory levels roughly mimic the overall residential market in the country. At the national level and across major cities too, almost two-thirds of the annual supply and demand pertain to these categories.”
Moreover, Nadar informed that the majority of the unsold units are in under-construction properties.
However, though the overall number of unsold units appears to be bigger, the inventory levels since Q1 2024 have been observed to be dropping sequentially.
Considering Q3 2024, as per Anarock, “Available housing inventory saw an 8 per cent yearly decline across the top seven cities amid strong sales—from over 610,000 units as of Q3 2023-end to over 564,000 lakh units by Q3 2024-end. The inventory decline is largely attributable to sales exceeding new launches in the quarter.”
Nadar is estimating the residential real estate sector to likely end on an optimistic note in 2024, with a decline in inventory levels driven by sales momentum, particularly in middle-income, luxury, and ultra-luxury segments in the mid- to long-term. “Overall unsold inventory levels, led by sturdy sales, have been declining steadily throughout 2024, and this is likely to continue over the next few quarters,” he added.