Housing Market Boom Reduces Inventory Selling Time by 31 per cent - A Report by JLL

Significant Reduction in Inventory Selling Time

 The residential sector in India’s top seven cities, including Delhi NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, and Kolkata, has seen a remarkable 31% decrease in the time required to sell active unsold housing inventory, according to JLL. In Q1 2024, the time to liquidate inventory dropped to 22 months, compared to 32 months at the end of 2019, driven by a significant surge in housing demand. This assessment is based on the average sales rate observed over the last eight quarters.

Consistent Growth in Housing Launches

Over the past five years (2019 – Q1 2024), the residential sector has witnessed consistent growth in housing launches, with nearly a million units launched during this period. Consequently, the actively selling unsold housing inventory reached approximately 468,000 units by March 2024, marking a 24% increase since December 2019. Despite this surge, there has been a notable reduction in the time required to sell these properties.

Sharp Decline in Selling Time for Affordable and Premium Segments

JLL's chief economist and head of research & REIS, India, Dr. Samantak Das, noted that both the affordable (up to Rs 75 lakh) and premium (Rs 1.5 crore - 3 crore) segments have seen a sharp decline of approximately 43% in the time needed to sell their respective unsold inventory levels. The affordable segment’s reduction is attributed to its decreasing share in launches over the last four years, while the premium segment’s decline comes despite a substantial increase in its share of annual launches—from around 2% in 2019 to 22% in 2023. The time needed to sell unsold inventory in the premium segment dropped from 51 months in 2019 to 29 months in Q1 2024, showcasing strong sales momentum.

Detailed Analysis of Market Performance

The analysis is based on active unsold inventory, excluding projects on hold. The data includes only apartments, excluding row houses, villas, and plotted developments. For Mumbai, the analysis includes Mumbai city, Mumbai suburbs, Thane city, and Navi Mumbai. For Delhi NCR, it includes Delhi, Gurugram, Noida, Greater Noida, Ghaziabad, Faridabad, and Sohna.

Among all price categories, the premium segment still takes the longest time to sell its unsold inventory, with an average of 29 months as of Q1 2024. However, the premium segment has seen a significant reduction in inventory liquidation time due to its relatively faster sales velocity, driven by strong buyer interest in larger homes with improved amenities.

City-wise Reduction in Inventory Selling Time

 Siva Krishnan, senior managing director (Chennai & Coimbatore) and head of residential services, India, JLL, explained that the time taken to liquidate housing stock has declined across most cities, including Delhi NCR, Bengaluru, Kolkata, Mumbai, and Pune, between December 2019 and Q1 2024. Delhi NCR recorded the sharpest decline, reducing from 48 months to just 14 months, attributed to robust sales in the premium and luxury segments with many quality projects selling out quickly upon launch. The anticipated momentum in the coming quarters is expected to further reduce the months to sell for available inventory in the near to medium term.