Mumbai, 13 Nov. 2019: Beating the slowdown blues, unsold residential inventory overhang in top 7 cities has reduced to 30 months as on Q3 2019 against 37 months in the corresponding period of 2018, reveals a recent ANAROCK report. The IT capital Bangalore has the lowest unsold inventory overhang at about 15 months while NCR has the highest at 44 months as on Q3 2019.
Unsold inventory overhang in months indicates the number of months it shall take for the current unsold housing stock to get cleared in the current market scenario. At any given point, an inventory overhang of 18-24 months is considered quite healthy.
Anuj Puri, Chairman – ANAROCK Property Consultants says, “If we look back and compare the yearly change in Q3 2018 with that of the corresponding period in 2017, there was only a minor reduction – from 39 months in Q3 2017 to 37 months in Q3 2018. Thus, the annual change of unsold inventory overhang in the third quarter of 2019 was fairly better than the previous year. This suggests that builders now are following a laser-focused approach towards clearing their previous unsold stock. Simultaneously, unlike earlier, builders have now also limited their new supply into the market. No wonder, new launches in Q3 2019 fell by 13% against the year-ago period in the top 7 cities whereas it had increased by 51% in Q3 2018 as against Q3 2017.”
Meanwhile, overall unsold inventory across the top 7 cities has recorded 5% yearly reduction – from 6.87 lakh units in Q3 2018 to nearly 6.56 lakh units as on Q3 2019. Bangalore remained on top with 17% yearly decline while cities like Chennai and Pune reported an increase of 4% and 2% respectively.
City-wise Inventory Overhang Change
Bangalore – with the lowest unsold inventory overhang of 15 months as on Q3 2019 – saw it reduce from 19 months a year ago and 25 months in Q3 2017.
Hyderabad’s unsold inventory will take 16 months to clear in the present scenario as against 20 months in Q3 2018 and 22 months as on Q3 2017.
In Pune, the inventory overhang has declined from 34 months in Q3 2018 to 27 months as on Q3 2019; it stood at 44 months back in the corresponding period of 2017.
Chennai’s unsold inventory overhang has reduced from 35 months in the third quarter of 2018 to 31 months in 2019. However, it was lowest best at 26 months in Q3 2017 – thus being the only city where the stock has increased on a two-yearly basis.
MMR’s inventory overhang stood at 34 months as on Q3 2019 end from 46 months a year ago and 51 months back in Q3 2017.
In Kolkata, unsold inventory will take at least 38 months to clear from hereon; a year ago in Q3 2018, it stood at 42 months while it was 43 months in Q3 2017.
NCR – one of the worst-affected residential markets in the country – currently has unsold stock which will take at least 44 months to clear. Back in Q3 2018, it was 58 months while in the corresponding period of 2017, it was 59 months.
Unsold Housing Stock
As per ANAROCK data, the top 7 cities collectively have total unsold stock of nearly 6.56 lakh units as on Q3 2019 end, reducing by 5% on yearly basis and nearly 12% in two years. The overall unsold stock in top cities was approx. 7.44 lakh units as on Q3 2017 which reduced to 6.87 lakh units as on Q3 2018.
Bangalore’s unsold stock as on Q3 2019 stood at approx. 63,540 units, declining the maximum among top cities by 17% in a year and over 38% in two years.
Hyderabad has the least unsold inventory among top cities at approx. 23,890 units as on Q3 2019. It was over 27,000 units a year ago and a little more than 27,500 units in 2017.
Kolkata’s unsold stock reduced by 8% in a year and stood at 45,570 units as on Q3 2019; it was 49,300 units a year ago and almost 48,750 units in Q3 2017.
NCR has also seen a decent decline in its unsold stock over the years – it reduced from 2.1 lakh units in Q3 2017 to 1.90 lakh units in Q3 2018 and then finally to 1.78 lakh units in 2019. Nevertheless, the city still has the second-highest unsold inventory.
MMR, having the highest current unsold stock of nearly 2.21 lakh units, saw a mere 1% yearly decline in its unsold pile while on a two-yearly basis, the stock reduced only marginally by 2%.
Chennai’s unsold stock increased by 4% on yearly and 12% on a two-yearly basis. As on Q3 2019, it is 31,380 units while it was nearly 30,220 units in Q3 2018 and 28,120 units in 2017 corresponding period.
Pune’s unsold stock, fairly more than its counterpart Bangalore, stood at approx. 92,560 units as on Q3 2019, up by 2% in a year from 90,610 units in Q3 2018. However, on a two-yearly basis, the unsold stock here saw a decline of 8%.