The Indian residential real estate market has marked a historic improvement, with inventory overhang decreasing to 22 months in the June quarter, down from 34 months a year earlier. This reflects strong demand, particularly in regions like Gurugram and Ahmedabad, where significant reductions in unsold inventory have been noted. Overall, unsold units have declined by 2% year-on-year, highlighting the market's adaptability. Key markets like the Mumbai Metropolitan Region and Pune continue to see substantial unsold stock due to new launches, indicating a responsive market to consumer demand.
The Indian residential real estate market has reached a significant milestone, with the inventory overhang (the estimated time needed to sell off unsold properties based on current sales rates) declining to 22 months in the June quarter, down from 34 months during the same period last year. This reduction highlights strong demand within the sector. Regional disparities are evident, with Delhi-NCR reporting the highest overhang at 31 months, while Kolkata boasts the lowest at 16 months.
According to the quarterly report titled "Real Insight Residential - April-June 2024" from a Gurugram-based firm, key regions showed notable improvements, particularly Gurugram in the NCR, where the inventory overhang plummeted from 72 months in Q2 2023 to 31 months in Q2 2024. Ahmedabad also performed well, reducing its overhang from 33 months to 18 months, signalling healthy demand dynamics in these markets.
Despite a decrease in supply and absorption rates, India's residential real estate market demonstrated resilience, achieving a 2% year-on-year decline in unsold inventory, which now stands at over 9.26 lakh units as of June 30. This decrease illustrates the market's ability to adapt to changing conditions while maintaining stability and reflecting ongoing buyer interest across various regions.
The inventory overhang across major Indian cities has seen substantial improvements compared to last year. Ahmedabad and Bangalore reported significant reductions, with Ahmedabad's inventory overhang dropping from 33 months to 18 months and Bangalore's from 36 months to 18 months. Delhi-NCR also experienced a notable decline from 72 months to 31 months, while Kolkata achieved a remarkable reduction from 34 months to just 16 months. On a national level, the overall inventory overhang fell to 22 months from 34 months, indicating a healthier equilibrium between supply and demand in the residential real estate sector.
Ahmedabad led the charge in reducing unsold inventory, cutting over 12,500 units, followed by the NCR region with a decrease of over 9,400 units. These reductions reflect robust demand and a positive outlook in these key cities, suggesting that the market is effectively absorbing available stock.
In the Mumbai Metropolitan Region (MMR) and Pune, the two most significant real estate markets in Maharashtra, these areas accounted for 54% of the total unsold inventory across the top eight cities at the end of the latest June quarter. The MMR and Pune markets have higher unsold stock due to a surge in new launches by developers responding to strong consumer demand. In the MMR, unsold housing stock increased by 1% to 339,362 units in April-June 2024 from 335,476 units during the same period the previous year.
In conclusion, the decline in inventory overhang across India's residential real estate market showcases a healthier balance between supply and demand. As regions like Gurugram and Ahmedabad demonstrate strong absorption of unsold units, the market signals a positive outlook. While MMR and Pune continue to hold significant unsold stock, the increase in new launches reflects developers' confidence in sustained consumer interest. Overall, the market's resilience and adaptability bode well for future growth and stability in the sector.
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