Luxury Housing Unsold Stock Rises 10%.

Luxury housing demand is losing the steam. At least 89,200 luxury units (priced above Rs 1.5 Crore) remained unsold across the top 7 cities by 2019-end; 81,290 units a year ago.

By Varun Singh

Luxury housing which was like the cherry on cake a few years ago, now for the same, sales are still in the doldrums.

Unsold luxury stock had increased by 10% y-o-y in the top 7 cities by 2019-end, reveals ANAROCK data.

There were 89,200 units of unsold luxury stock (homes priced above Rs 1.5 Crore) by 2019-end as against 81,290 units in 2018.

Overall value of unsold luxury stock as on 2019 is estimated to be nearly Rs 1.59 lakh crore, which is 34% of total unsold stock value.

Anuj Puri, Chairman, Anarock Property Consultants says, overall unsold housing stock across different budget segments stood at 6.48 lakh units worth Rs 4.64 lakh crore in top 7 cities by 2019-end, declining by mere 4% since 2018. On breaking down the unsold stock at the two extreme ends of the budget spectrum, it emerges that affordable homes comprised the maximum share at 36% while luxury homes had the least, with less than 14% share. Luxury developers have severely curtailed the supply pipeline, primarily due to the absence of investors in this segment. 

Source: ANAROCK Research

Mid-segment homes priced between Rs 40-80 lakh shed the maximum unsold stock in 2019 by 15% – from nearly 2.27 lakh units in 2018 to approx. 2.02 lakh units in 2019-end. 

Except Kolkata, all cities saw their unsold luxury stock increase in 2019:

• Kolkata – in sharp contrast to other cities – saw a 10% decline in its unsold luxury stock, from 2,265 units as on 2018-end to approx. 2,050 units by 2019.
• MMR did reasonably well – despite adding almost 11,250 luxury units in 2019, the region saw a mere 2% y-o-y increase in unsold stock – from 48,040 units in 2018 to 48,970 units by 2019-end.
• Hyderabad and Pune saw unsold luxury stock increase by a whopping 58% and 56% respectively during the period. Hyderabad’s pent-up luxury stock rose from 3,000 units in 2018 to nearly 4,740 units in 2019; in Pune, it increased from 2,750 units in 2018 to 4,290 units in 2019. 
• In Chennai, unsold luxury stock increased by 33% in a year – from 2,480 units in 2018 to nearly 3,300 units by 2019-end.
• NCR saw its unsold luxury stock increase by 17% in the period. The unsold luxury stock here was the second-highest after MMR with around 18,400 units by 2019-end.
• Bangalore’s unsold luxury stock also increased by 6% – from 7,010 units in 2018 to 7,470 units by 2019-end.

Of the total current unsold stock of nearly 6,48,400 units in the top 7 cities, affordable housing (priced below Rs 40 lakh) comprised the maximum share at about 36%, followed by 31% in the mid-segment (Rs 40-80 lakh). The share of unsold premium homes priced between Rs 80 lakh and Rs 1.5 Cr was 19%, while luxury accounted for 14%.

• Mid-segment homes shed over 15% unsold stock during the year – from 2,36,600 units in 2018-end to approx. 2,01,670 units by 2019-end. Bangalore and Hyderabad saw the maximum yearly stock decline of 37% and 34% respectively.
• Affordable housing, with the highest new supply in 2019, affordable homes saw unsold stock reduce by a marginal 1% – from 2,38,750 units in 2018 to 2,36,640 units by 2019-end. Hyderabad, Kolkata, Chennai and NCR shed maximum unsold affordable stock – by 28%, 11%, 10% and 9% respectively.
• Unsold stock of premium homes priced from INR 80 lakh to Rs 1.5 Cr increased by 4% to 1,20,900 units as on 2019-end.

Some Important Takeaways

• At least 89,200 luxury units (priced above Rs 1.5 Crore) remained unsold across the top 7 cities by 2019-end; 81,290 units a year ago
• Total unsold stock across budget segments at 6.48 lakh units in top 7 cities by 2019-end is worth Rs 4.64 lakh crore
• MMR had highest unsold luxury stock share at 55% (approx. 48,970 units), but also saw least yearly stock increase (2%) among top cities
• Hyderabad recorded highest jump of 58% in unsold stock – from 3,000 units in 2018-end to 4,740 units by 2019-end
• Only Kolkata saw a 10% decline in its unsold stock

Also Read: Affordable Homes: Biggest Beneficiary of Budget 2020.