The residential sector in India’s top seven cities, including Delhi NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, and Kolkata, has witnessed a significant 31% decrease in the time it will take to sell the active unsold housing inventory, as analysed by JLL. In Q1 (Jan-March) 2024, the time to liquidate inventory has dropped to just 22 months, compared to 32 months by the end of 2019, driven primarily by an exponential surge in housing demand. This assessment is based on the average sales rate observed over the last 8 quarters.

In the past five years (2019 – Q1 2024), the residential sector has witnessed a consistent growth in housing launches, with almost a million units launched during this period. As a result, the actively selling unsold housing inventory has reached approximately 468,000 units by March 2024, marking a 24% increase since December 2019. However, despite this surge in unsold inventory, there has been a remarkable reduction in the estimated time required to sell these properties.

“Interestingly, both the affordably priced (apartments priced up to INR 75 Lakh) and premium (apartments priced between INR 1.5 crore-3 crore) segments have seen a sharp decline of ~43% each in the time needed to sell their respective unsold inventory levels. While the fall in the former was due to its reducing share in launches over the last four years, the premium segment saw this decline despite a substantial jump in the segment’s share in annual launches – from ~2% in 2019 to 22% in 2023. Infact, time needed to sell the unsold inventory in the premium segment has dropped from 51 months in 2019 to 29 months in Q1 2024, showcasing the strong sales momentum in this segment. Apartments belonging to ticket size category of INR 3.0 crore and above, have also witnessed a 11% reduction in time to sell during the same time.” said Dr Samantak Das, Chief Economist and Head Research & REIS, India, JLL.

Data includes only apartments. Rowhouses, villas, and plotted developments are excluded from our analysis.

Among all price categories, it is noteworthy that the premium segment still takes the longest time to sell its unsold inventory, with an average of 29 months as of Q1 2024. However, despite this longer selling period, the premium segment has experienced a significant reduction in inventory liquidation time due to its relatively faster sales velocity. This segment has emerged as the top performer, driven by strong buyer interest in larger homes with improved support amenities.

“Time taken to liquidate the housing stock has declined across majority of the cities like Delhi NCR, Bengaluru, Kolkata, Mumbai, and Pune between December 2019 and Q1 2024. Delhi NCR has recorded the sharpest decline in terms of months to sell, coming down from 48 months to just 14 months. This can be attributed to robust sales in the premium and luxury segment in Delhi NCR with a lot of quality projects getting completely sold out within days of their launch. With anticipated momentum in the coming quarters, the months to sell for the available inventory are likely to decline further in the near to medium term.” said Siva Krishnan, Senior Managing Director (Chennai & Coimbatore), Head – Residential Services, India, JLL

Bengaluru and Delhi NCR require the least time to liquidate their current active unsold inventory.

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By Varun Singh

A resurgence in residential demand has led to a 5% increase in prices across the top eight cities (Delhi-NCR, MMR, Kolkata, Pune, Hyderabad, Chennai, Bengaluru, and Ahmedabad) while registering a marginal decline in unsold inventory during Q2 2022. Residential prices, which have surpassed pre-pandemic levels, have been seeing an upward trend led by rising demand amidst rising prices of construction materials. Delhi-NCR saw the highest increase in residential prices at 10% YoY, followed by Ahmedabad and Hyderabad with 9% and 8% YoY increase respectively.

The sales momentum that started in the latter part of last year continued in Q2 2022 as well, led by pent-up demand and attractive pricing. Hence, despite rising prices and an increase in new launches in the last few quarters, unsold inventory saw a dip in the majority of the cities. Bengaluru witnessed the steepest decline of 21% YoY in its inventory overhang, led by higher sales.  Only Hyderabad, MMR and Ahmedabad saw an increase in unsold inventory, which was led by significant new launches. MMR still accounts for the highest share in unsold inventory at 36%, followed by 14% in Delhi- NCR and 13% in Pune.

Harsh Vardhan Patodia, President of CREDAI National stated, “The central bank continues to increase repo rates to offset the impact of inflation and banks are expected to increase loan interest rates  including that of home loans. As captured in this report, the housing prices have increased between 2 – 5% across cities, as materials and labour costs continue to remain high. We may see a marginal dip in demand due to increasing interest rates, but I am confident that the sales will continue to grow across segments from September, as we enter the festive season”.

 “Rising homeownership amongst millennials supported by higher disposable income and willingness to upgrade to larger spaces equipped with better amenities have sparked a sharp growth in housing demand in the last few quarters. Demand for self-sustained properties replete with best-in-class amenities has also been increasing post-pandemic. These have led to strong growth in housing sales in the last few quarters. Prices have also seen a 5% rise on YoY basis.

RBI has increased the repo rate amidst inflationary pressures and banks have already begun increasing the lending rates. However, the upcoming festive season is likely to keep the market sentiment high resulting in higher sales.” said Ramesh Nair, Chief Executive Officer | India & Managing Director, Market Development | Asia, Colliers.

“Price to remain range bound. With discounted EMI schemes, we see early signs of developers absorbing the impact of increasing interest rates. Sales volumes are likely to improve as we see growing new supply with festive offers, said Pankaj Kapoor, Managing Director, Liases Foras”.

Pan India residential prices Q2 2022–

Delhi-NCR saw the highest YoY change with a 10% surge in residential prices

Over the period of two years prices in Delhi-NCR have been rising. Delhi NCR saw the highest increase in prices across Pan India at 10% with an average carpet price of INR 7,434/ sq feet in Q2 2022. Golf course road saw the highest price rise of 21%YoY followed by Noida Expressway. The entire region’s inventory dropped 10% YoY in Q2 2022, as developers focused on offloading older projects. While overall unsold inventory is the lowest in three years, the majority of the unsold inventory is concentrated in Noida extension and Greater Noida, followed by Ghaziabad.

Unsold inventory in MMR rose 14% YoY, while prices remained range-bound

MMR, which accounts for the highest unsold inventory at 36% share, saw a 14% rise in unsold inventory in the last year. The rise in unsold inventory was led by significant new launches in the city. Housing prices largely remained range-bound, with a slight rise of 1% YoY. However, Western suburbs (beyond Dahisar) saw the highest increase in prices at 12% YoY. Unsold inventory in Central suburb extension accounts for 26%, majority share in the price range of INR 7,500-10,000 per sq ft. Bengaluru sees the steepest drop in unsold inventory at 21% YoY

Bengaluru witnessed a sharp decline in its unsold inventory during Q2 2022, dropping by 21% YoY. Inventory overhang in Bengaluru is continuously falling since the beginning of 2019 and is currently the lowest in the last three years. Almost the entire unsold inventory is in Bengaluru’s peripheral areas. This is owing to the large number of projects being launched in the peripheral areas of the city, due to promising prospects in these locations.

Also Read: Luxury Housing Clocks 12% Supply Share in Q2, Mumbai Leads

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