Under-Construction Property inventory in major Indian cities has dropped the most in the past seven years as fresh housing starts have lately trailed sales, Axis Capital said in a report.
The study said that Pune has emerged as the best market in India in volume terms, followed by Hyderabad while Mumbai has seen the largest inventory decline.
“The credit crisis that began in FY18-19 accelerated the pace of consolidation and benefitted grade-A developers more. As unsold inventory at under-construction projects decline, we expect developers to step up launches again from FY23,” the report said.
Pune has emerged as the largest market with the lowest inventory levels (age of unsold inventory) while MMR’s (especially Mumbai) inventory months have reduced by nearly a half.
In Pune, the age of unsold inventory is close to 15 months, which means all housing units launched before that have been sold. In Mumbai, the inventory months have reduced from 40 to a little over 20 in the last 5-6 years.
NCR continues to lag on both the parameters.
“The onset of RERA, post 2018, initiated the process of consolidation in the sector, leading to buyers being more aware and confident of the projects. Last few years also saw muted demand, leading to a fall in the number of new project launches across the markets,” said Sumeet Abrol, Partner- Lead Advisory, Grant Thornton Bharat.
Developers also focused on selling under-construction properties instead of fresh housing starts.
“We focused on selling our under-construction projects; this segment moved very fast for us. Our focus remained on timely delivery of the projects to our customers,” said Pankaj Bansal, Director,M3M.
Inventory levels, especially in markets such as Mumbai, Pune and Thane, are at a decadal low.
Bangalore still remains at above two years of inventory but primary sales have dropped consistently.
Source : ET