Record high real estate inventory an opportunity not a concern, as sales, demand stay robust

  • Admin
  • 13/12/2023
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Record high real estate inventory an opportunity not a concern, as sales, demand stay robust

Source: Money Control

India's real estate sector has recovered robustly following challenges posed during the pandemic and homebuyers losing trust because of delayed projects and fraud by some developers. Housing sales in eight major cities grew to a six-year quarterly high in July-September on strong demand, allowing developers to regain lost ground, according to Knight Frank data. However, some recent reports have highlighted an increase in inventory levels.

Realty inventory has surged by 28 percent on-year in the first half of the current financial year, propelling the combined value of unsold homes of leading listed companies to a record high of more than Rs 1 lakh crore, as per a media report. This amount is equivalent to 33 months of sales at the current pace. According to experts, a majority of this inventory is on account of new product launches, which is not a concern but an opportunity.

While inventory is at a record high, there are pockets in the country where the level of unsold homes has been declining. Unsold housing inventory across tier 1 cities dropped to 508,000 units in the third quarter of calendar 2023 from 526,000 units in Q2, according to a report by PropEquity. In the National Capital Region, which includes New Delhi, Noida and Gurugram, the unsold housing stock dropped by 7 percent. Developers are strategically prioritising the sale of older inventory while launching fewer new projects.

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