Robust Housing demand helps in faster inventory liquidation

Real estate developers in India are leveraging the strong housing demand to clear their existing stocks, reducing the overhang of unsold properties that had been a concern in previous years. A healthier balance between demand and supply has also stabilised the market. Residential property markets in the top seven cities - Mumbai, Delhi-NCR, Pune, Bengaluru, Chennai, Hyderabad and Kolkata - have witnessed a significant 31% decrease in the time taken to sell active unsold housing inventory, showed a JLL analysis. In the March quarter, the time taken to liquidate inventory dropped to 22 months from 32 months at the end of 2019, driven primarily by an exponential surge in housing demand. This assessment is based on the average sales rate observed over the last eight quarters.  While the fall in the affordable housing segment was due to its reducing share in launches over the last four years, the premium segment saw this decline despite a substantial jump in the segment's share in annual launches to 22% in 2023 from 2% in 2019. According to him, time needed to sell the unsold inventory in the premium segment has dropped from 51 months in 2019 to 29 months in the first quarter of 2024, showcasing the strong sales momentum in this segment. Apartments belonging to sell its unsold inventory, with an average of 29 months as of March end. However, despite this longer selling period, the premium segment has experienced a significant reduction in inventory liquidation time due to its relatively faster sales velocity. This segment has emerged as the top performer, driven by strong buyer interest in larger homes with improved support amenities.

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