Builders in India are sitting on an unsold stock consisting of 7,35,852 units as on March 31, 2022; Delhi NCR has the highest inventory overhang while Bengaluru and Kolkata have the lowest.
There has been a seven percent increase in the number of units sold in the first quarter of 2022 compared to the first quarter of 2021 and Mumbai and Pune had the biggest share in housing sales, with their combined share standing at 56 percent in the overall sales across the top eight cities, a new report by PropTiger has said.
The report by the Gurgaon-headquartered company, which is part of REA India that also owns Housing and Makaan shows that 70,623 units were sold in Q12022 as compared to 66,176 units sold in Q12021, registering 7 percent YoY growth.
The improvement in terms of new supply was significantly higher, with a YoY growth of 50 percent in new launches during the same period. A total of 79,532 units were launched in Q1 2022 as compared to 53,037 units in Q1 2021, it said.
In a quarter during which the demand for housing units priced in the range of Rs 45-75 lakh was the highest, Mumbai and Pune had the biggest share in housing sales, with their combined share standing at 56 percent in the overall sales.
The markets covered in the quarterly report, titled Real Insight Residential – January-March 2022, include Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, Delhi-National Capital Region and Pune.
“India’s housing sector is again emerging as a bright spot in the country’s economy, helping it spring out of the pandemic-induced slowdown. With further normalisation of activity in the months to follow, we expect greater positive changes,” said Dhruv Agarwala, Group CEO, PropTiger, Housing and Makaan
In a quarter during which the demand for housing units priced in the range of Rs 45-75 lakh was the highest, Mumbai and Pune had the biggest share in housing sales, with their combined share standing at 56 percent in the overall sales.
Even though the recent joint consumer survey conducted by the group company of REA India, Housing and Industry body NAREDCO, found that 57 percent of potential homebuyers would prefer to buy a ready-to-move-in (RTMI) property, 79 percent of the sales during the quarter ended in March was seen in the under-construction category, mainly because of the price advantage this segment offers over the ready to move in segment.
Half the cities show decline in launches
The MMR market did the heavy lifting in terms of new supply in the quarter ended March 31, demonstrating a 246 percent increase YoY. Hyderabad saw an increase of 92 percent. Cities where new launches showed a decline during the March quarter include Ahmedabad, Chennai, Delhi-NCR and Kolkata. Chennai saw the least number of launches and witnessed a decline of almost 71 percent.
Property prices climb
As expected, housing price growth also accelerated during the quarter, with every market covered in the analysis showing an upwards movement in average rates of new properties. Most of this increase in rates can be attributed to the hike in prices of building materials.
The sharpest uptick in property prices was registered in Chennai, where the average rate of properties has undergone a 9 percent appreciation in the past one year, the report shows. Pune and Ahmedabad followed this southern market closely in terms of price increase, with both markets witnessing an 8 percent rise in their average property rates. Delhi-NCR and Mumbai saw rates increase by 4 percent.
Housing inventory increases marginally amid higher supply numbers
As activity in housing supply picked up pace, housing inventory swelled slightly, at an annual rate of 4 percent. Builders in India are sitting on an unsold stock consisting of 7,35,852 units as on March 31, 2022. This number stood at 7,05,344 units at the end of March 2021. With an individual share of 35 percent and 16 percent, respectively, Mumbai and Pune continue to contribute the most to this national housing inventory.
However, inventory overhang— the estimated period builders are likely to take to sell off their unsold stock— has declined to 42 months as against 47 months a year ago, primarily because of higher demand for housing. Delhi NCR has the highest inventory overhang while Bengaluru and Kolkata have the lowest.
