Unsold inventories of real estate

Unsold inventories of real estate
01/06/2019 , by , in EXPERT ZONE

Authored by ManjuYagnik, Vice Chairperson, Nahar Group & Vice President, NAREDCO (Maharashtra)

“Indian homebuyers are returning to the residential market across the metros which means the troublesome movement of rising inventory since 2014 onwards is detaining. The unsold inventories which rose in the year 2017 because of policies against the real estate market was only temporary till the sector restored trust. After the stable government coming into power, and the cut on GST and as well as lowered tax reforms, it is likely that buyer can now eligibly apply for loan and conclude a buying decision. To further facilitate sales, it would be for the government to look at reduction in the interest rate of home loans and uncap the exemption limit of the income tax paid on income.”

Housing sales recorded in Q1 2017 were merely 46,000 units across the top 7 cities. Sales rose by a whopping 71% in two years to reach nearly 78,520 units in Q1 2019

  • Average property prices saw less than 2% rise in the last two years – from INR 5,480 per sqft. in Q1 2017 to INR 5,570 per sqft. in Q1 2019
  • While the top 7 cities saw a cumulative drop of 16% 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% – from nearly 1,18700 units in Q1 2017 to 66,820 units in Q1 2019. Hyderabad followed with a 21% decline in the same period
  • Delhi-NCR saw unsold stock decrease by a significant 18% during this period, leaving the other ‘heavyweight’ market MMR far behind
  • MMR cleared a mere 4% 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

 

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