Unsold Housing Inventory In Top Seven Indian Cities Nears Pre-Pandemic Levels
Housing inventory across the top seven cities fell to 32 months by 2021-end from 55 months a year ago.
Unsold residential inventory in top seven Indian cities came down to the levels seen pre-Covid as property sales recovered in 2021.
Sales in Mumbai, Delhi-National Capital Region, Bengaluru, Hyderabad, Pune, Chennai and Kolkata rebounded to more than 90% of the pre-pandemic 2019 levels, Anarock said in a statement. That caused the housing inventory across the cities to fall to 32 months by 2021-end from 55 months a year ago.
Inventory indicates the number of months it will take for the unsold housing stock on the market to sell at the current absorption rate. An inventory overhang of 18-24 months, according to the real estate consultant, is considered “relatively healthy” at any given period.
“In 2021, the top seven cities recorded sales of about 2.36 lakh units,” Anuj Puri, chairman at Anarock Group, was quoted as saying in the statement. “Housing sales in the October-December quarter broke all records of the last 28 quarters (six years) and breached the 90,000-unit mark.”
Factors such as positive homebuyer sentiment, all-time low home loan rates, and anticipation of imminent price hikes drove sales.
Among the top seven cities, NCR remained the “frontrunner” in reducing overall inventory in the last one year from 89 months in 2020 to 49 months in 2021, Puri said. “It’s close to reaching the pre-pandemic levels of 45 months in 2019-end.”
Bengaluru currently has the lowest inventory overhang at 21 months. The city, the statement said, is “undoubtedly one of the most resilient residential markets in the country, driven by the booming IT sector”.
Factoring in the current housing sales momentum and guarded new supply across cities, the overall inventory overhang, according to the statement, may reduce further in the coming quarters, if a high-impact third Covid-19 wave does not break the pace.
Other Highlights
Hyderabad’s inventory overhang reduced to 30 months in 2021 from 52 months in 2020. Though Hyderabad added the second-highest new supply in 2021 after Mumbai, the current inventory overhang indicates that the market witnessed decent sales in the year.
Pune’s inventory overhang stood at 32 months as of 2021-end. It was 48 months in 2020 and 27 months as of 2019.
Chennai, too, saw a considerable drop in its inventory overhang—from 61 months in 2020 to 33 months in 2021.
Kolkata residential inventory overhang has dropped from 69 months in 2020 to 39 months as of 2021-end.
The inventory overhang in Mumbai has sunk below 30 months for the first time since 2015, attaining an all-time low of 29 months in 2021. MMR recorded the highest sales among all top cities with about 76,400 units sold last year—an increase of 72% against 2020. The region now has the second-lowest inventory overhang after Bengaluru.