Unsold under-construction property inventory sees sharp fall in past seven years: Report
Among major cities, Pune has the least unsold inventory
Major Indian cities have seen the sharpest drop in the under-construction inventory over the past seven years, according to a report by Axis Capital. The report further stated that fresh housing projects of late due to trailed sales of already developed properties.
According to Axis Capital’s study, Pune emerged as the best realty market in the country in terms of volume. According to the report, the realty market in Pune showed the lowest inventory levels (age of unsold inventory) while the average age of unsold inventory in Mumbai Metropolitan Region (especially in Mumbai) showed the sharpest reduction by nearly 50%.
Selling like hot cakes
The average age of unsold inventory in Pune was nearly 15 months, meaning that all housing units launched before 15 months in the city had been sold. In Mumbai, this average age of unsold inventory dropped from 40 months to 20 months over the last five to six-year period. In terms of the volume of unsold inventory, Pune was followed by Hyderabad.
A report by The Economic Times quoted Sumeet Abrol, Partner- Lead Advisory, Grant Thornton Bharat, as saying, “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. The last few years also saw muted demand, leading to a fall in the number of new project launches across the markets.”
The new launches by developers were expected only in FY23. “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 declines, we expect developers to step up launches again from FY23,” the ET reported citing Axis Capital’s findings.
No hurry to launch new projects
The report highlighted that the reduction in the level of unsold inventory was made possible by the developers focusing on selling their under-construction properties before launching new projects. The story claimed that inventory levels, particularly in markets such as Mumbai, Pune and Thane, were at a decadal low, while the average age of inventory in Bangalore still was at over two years through the primary sales have dropped consistently.
Pankaj Bansal, Director, M3M was quoted by ET as saying, “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.”