By the end of Q1 2023, the housing inventory is expected to decrease to 20 months, compared to 42 months in 2018

According to ANAROCK Research, the inventory overhang in the top 7 cities in India fell to a record low of 20 months by the end of Q1 2023, down from 42 months in Q1 2018, marking a five-year low. By Q1 2020, the top 7 cities had seen the highest inventory overhang of 55 months. Inventory overhang is the time it takes to sell the current unsold housing stock in the market at the current absorption rate, and a healthy range for it is considered to be 18-24 months.

NCR saw the largest reduction in inventory overhang, with an overall decrease of 43 months over the last five years, from 66 months in Q1 2018 to approximately 23 months in Q1 2023, the lowest it has been in five years. Bengaluru has the lowest inventory overhang at 13 months, followed by Pune, Chennai, and Kolkata, each with an overhang of 20 months. Hyderabad’s inventory overhang decreased to 21 months in Q1 2023 from 23 months in Q1 2018, despite adding the second-highest new supply in the last year.

In MMR, the inventory overhang has shrunk by 34 months over the last five years, reaching an all-time low of 21 months in Q1 2023. MMR had the highest sales among the top cities, with approximately 34,690 units sold in the quarter, marking an increase of 182% compared to the same period in 2018.

ANAROCK Chairman Anuj Puri noted that Q1 2023 saw an all-time high sales of over 1.14 lakh units in the top 7 cities, breaking all records and breaching the 1 lakh units mark for the first time. Strong homeownership sentiment, relatively lower home loan rates, strong momentum in luxury housing, and the anticipation of further price hikes were the major factors in boosting housing sales and bringing down the overall residential inventory overhang across the top cities.
Additionally, the cumulative unsold stock in the top 7 cities saw a 12% decline over the last five years, from 7,13,400 units in Q1 2018 to approximately 6,26,750 units in Q1 2023.

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