Unsold housing stock overhang eases a bit

Chennai: Cumulative unsold housing stock across top 7 cities dropped 5 per cent at the end of September quarter. The average time needed to clear this unsold stock has reduced to 30 months from 37 months in the year-ago quarter.

The top 7 cities collectively had a total unsold stock of nearly 6.56 lakh units in Q3 2019 end, 5 per cent down from 6.87 lakh units in Q3 2018 and nearly 12 per cent lower than 7.44 lakh units as on Q3 2017.

Bangalore’s unsold stock as on Q3 2019 stood at 63,540 units, declining the maximum among top cities by 17 per cent in a year and over 38 per cent in two years. This made Bangalore, the city with the lowest unsold inventory overhang of 15 months as on Q3 2019 from 19 months a year ago and 25 months in Q3 2017.

Hyderabad has the least unsold inventory among top cities at 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. 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.

“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 per cent against the year-ago period in the top 7 cities whereas it had increased by 51 per cent in Q3 2018 as against Q3 2017,” said Anuj Puri, Chairman, ANAROCK Property Consultants.  

However, NCR will take at least 44 months to clear its unsold stock. Back in Q3 2018, it was 58 months while in the corresponding period of 2017, it was 59 months. 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 after Mumbai Metropolitan Region (MMR).

MMR with nearly 2.21 lakh units, saw a mere 1 per cent yearly decline in its unsold pile while on a two-yearly basis, the stock reduced only marginally by 2 per cent. 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.

Contrary to the trend, Chennai’s unsold stock increased by 4 per cent on yearly and 12 per cent on a two-yearly basis. Though Chennai’s unsold inventory overhang has reduced from 35 months in the third quarter of 2018 to 31 months in 2019, it was lowest best at 26 months in Q3 2017.