The major Indian cities has witnessed drop in under construction property inventory in past seven years with the fresh housing starts have lately trailed sales, Axis Capital report stated. As per the report, Pune has topped the list as the best market in India in volume terms which is followed by Hyderabad and Mumbai that have registered the largest inventory decline.
The Report further stated “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”. Pune came out as the largest market with lowest inventory levels of unsold inventory while MMR’s, especially Mumbai , inventory months have lowered by nearly a half. The age of unsold inventory in Pune is near to 15 months which indicates that all housing units launched before 15 months have been sold out. Mumbai on the other hand has seen the inventory months reduced from 40 to close to 20 in the last 5-6 months.
NCR lagged on both the parameters. Sumeet Abrol, Partner-Lead Advisory, Grant Thornton Bharat, said “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”.
The focus of developers was to sell under construction properties instead of fresh housing. Pankaj Bansal, Director of M3M said “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”.
Inventory levels in realty markets such Mumbai, Pune and Thane are registered at decadal low. Banglore was found to be above two years of inventory but it saw drop in sales consistently.