5 Factors That Have Reduced Housing Inventory Sell Time in India's Top Cities
- 7th Jul 2024
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The residential real estate sector in India's top cities, including Delhi NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, and Kolkata, has experienced a significant improvement. According to a recent report, the time required to sell active unsold housing inventory has decreased by 31%, reducing from 32 months in 2019 to just 22 months in Q1 2024.
India's Housing Market Sees 31% Drop in Inventory Sell Time: Ghar explores 5 Key Factors
1. Exponential Surge in Housing Demand
The sharp reduction in sell time is driven by a notable increase in housing demand. From 2019 to Q1 2024, nearly a million housing units were launched across these top seven cities. Despite the increased number of units, the actively selling unsold inventory reached approximately 4,68,000 units by March 2024—a 24% increase since December 2019. The robust demand has contributed to quicker sales and reduced inventory.
2. Strong Sales Momentum in Affordable and Premium Segments
Both affordable apartments (priced up to Rs 75 lakh) and premium apartments (priced between Rs 1.5 crore and Rs 3 crore) have seen a significant decline in the time needed to sell their unsold inventory, with a 43% reduction for each segment. Affordable apartments saw this due to a decrease in their launch share over the last four years. Meanwhile, the premium segment's share in annual launches jumped from 2% in 2019 to 22% in 2023, yet it still saw a decline in sell time from 51 months in 2019 to 29 months in Q1 2024.
Key Facts and Figures:
- Reduction in Sell Time: From 32 months in 2019 to 22 months in Q1 2024 (31% decrease).
- Active Unsold Inventory: Approximately 4,68,000 units by March 2024 (24% increase since December 2019).
- Affordable Apartments: 43% reduction in sell time.
- Premium Apartments: 43% reduction in sell time; annual launches share increased from 2% in 2019 to 22% in 2023.
- High-End Market: 11% reduction in selling time.
- Delhi NCR Sell Time: Reduced from 48 months in 2019 to 14 months in Q1 2024.
3. Performance of the High-End Market
Apartments priced above Rs 3 crore also experienced an 11% reduction in selling time, indicating strong sales momentum across various price categories. The premium segment still takes the longest to sell, averaging 29 months as of Q1 2024, but this is a marked improvement from previous years.
4. City-Specific Trends and Robust Sales
Different cities have shown varied improvements in their sell times. Delhi NCR, for instance, saw the most significant drop, reducing from 48 months in December 2019 to just 14 months in Q1 2024. This sharp decline is attributed to strong sales in the premium and luxury segments, where quality projects are often sold out within days of their launch.
5. Anticipated Market Momentum
The momentum in the housing market is expected to continue, with further reductions in the time to sell available inventory anticipated in the near to medium term. Cities like Bengaluru and Delhi NCR are currently leading the trend, requiring the least time to liquidate their active unsold inventory.
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