Housing Inventory Lowest In 3 Years: PropTiger Report
India’s real estate developers are firmly sticking with the caution mode with new project launches declining 32 per cent in the fourth quarter (Q4) of the last financial year (FY19) annually, data show. According to Realty Decoded, a quarterly analysis of India’s nine key housing markets by PropTiger.com, home sales in these cities also declined five per cent during the same period.
An indication that the sector is on its way to better health, inventory overhang in these cities reduced 10 per cent, hitting the lowest level in the past three years. As against 890,719 in the March quarter of the previous financial year, inventory overhang stood at 800,438 in the same quarter in FY’19. As against 39 months in the corresponding quarter in FY’18, it would now take an average 30 months for real estate developers to sell the existing housing stock, the report shows.
Unsold Inventory as on quarter end
With Hyderabad standing as an only exception, rates of properties across cities remained largely unchanged.
The cities included in the analysis are Ahmedabad, Bengaluru, Chennai, Gurugram (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Noida (includes Greater Noida and Yamuna Expressway) and Pune.
Winners and losers
Hyderabad shining: Across parameters, the city is seen doing significantly better than its peers. While rates of property increased 14 per cent in the City of Nizams in the past one year, home sales also increased by 26 per cent. At 17 months, inventory overhang was also the lowest in Hyderabad during the quarter.
Noida, Ahmedabad struggle: Noida real estate’s struggle is seen continuing, with home sales declining 50 per cent and new launches falling 28 per cent. While rates of property declined one per cent annually, Noida features in the list of cities with the highest inventory overhang. It would take realtors here about three years to sell off the existing stock, the report shows.
Ahmedabad has the highest inventory overhang ─ it would take realtors an average of 40 months to sell off the existing stock. Amid launches declining 97 per cent and prices seeing some downwards adjustment, home sales in Ahmedabad fell 10 per cent.
Chennai growing: New launches in the Tamil Nadu capital more than doubled in the March quarter. An upwards movement in launches was also seen in Pune (21 per cent) and Gurugram (five per cent).
Pune, the performer: Pune realty saw improvement across parameters. Launches (21 per cent), sales (five per cent) and property prices (two per cent) all increased in the city in the March quarter amid thinning inventory stock.
Affordable is the word: About 58 per cent of all units launched during the quarter were affordable housing units measuring up to 60 square metre (sqmt). Also, 60 per cent of all launches during the period were priced below Rs 50 lakh.
Similarly, affordable housing units contributed 55 per cent to the overall sales. Units within 60-sqmt area contributed 49 per cent to sales. Interestingly, almost half of the unsold units are also sized below 60 sqmt.
Ready-to-move-in is the key: The crisis involving project delays has led to buyers opting for ready-to-move-in units. As against 62,002 ready-to-move-in homes, only 13,704 under-construction units were sold in Q4.
The search of those looking for ready-to-move units could end in Ahmedabad and Chennai as a significant part of the unsold inventory in these cities are completed homes.
Arriving soon: Over 600,000 fresh units will be delivered in the coming year, data show.