Housing inventory overhang at record low of 22 months in Q2 2024 as sales soar; Ahmedabad, Delhi-NCR top performers
At the end of June 2024, unsold inventory across top eight cities stood at 9.26 lakh home units; positive sales momentum to continue in the festive season
India’s residential real estate inventory overhang reached a record low of 22 months in the April-June period of 2024, down from 34 months in the same period last year, reflecting a healthier balance between supply and demand in the residential real estate market.
In a quarterly report titled ‘Real Insight Residential – April-June 2024’, proptech company REA India listed Ahmedabad as the best performer across the top eight markets, reducing its inventory overhang from 33 months to 18 months by cutting over 12,500 units annually during the quarter ended June 2024. Meanwhile Delhi-NCR experienced a notable drop from 72 months to 31 months, with a decrease of over 9,400 units year-on-year in Q2 2024.
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Inventory overhang is understood as the estimated time required to sell off unsold stock based on sales velocity.
Elaborating on unsold inventory, the report noted that despite a moderation in supply and absorption rates, the pan-India residential real estate market recorded a 2% year-on-year decline, bringing the total to over 9.26 lakh units as of June 30.
“As we approach the festive season, we anticipate this positive momentum will continue to gain strength, further boosting market activity and buyer engagement across the country,” said Vikas Wadhawan, Group CFO - REA India and Business Head, PropTiger.com.
How the numbers stack up
According to the report, the Mumbai Metropolitan Region (MMR) and Pune -- the two most important real estate markets in Maharashtra -- accounted for 54% of the total unsold inventory across top eight cities at the end of the June quarter.
“The MMR and Pune markets have comparatively high unsold stock because of an increase in the number of new launches by developers as a response to strong consumer demand,” the report reasoned.
The unsold housing stock in MMR and Pune rose 1% each year-on-year to 3,39,362 units and 1,57,555 units, respectively.
Besides Mumbai and Pune, Hyderabad was the only market across the top eight cities to see an addition to the unsold stock annually to 1,32,178 units in the quarter ended June 2024.
Data cited in the report showed that inventory overhang in Kolkata saw a reduction from 34 months to 16 months year-on-year with 21,098 unsold units at the end of Q2 2024. In Bengaluru, the metric plunged from 36 months to 18 months with 81,153 units.
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In Chennai, the inventory overhang fell to 24 months in Q2 2024, from 28 months in the second quarter of 2023. Meanwhile Hyderabad saw a reduction to 26 months from 39 months year-on-year during the three-month period, per the report.