The residential sector in India's top seven cities, including Delhi NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, and Kolkata, has witnessed a significant 31% decrease in the time it will take to sell the active unsold housing inventory, as analysed by JLL. In Q1 (Jan-March) 2024, the time to liquidate inventory has dropped to just 22 months, compared to 32 months by the end of 2019, driven primarily by an exponential surge in housing demand. This assessment is based on the average sales rate observed over the last 8 quarters.
In the past five years (2019 - Q1 2024), the residential sector has witnessed a consistent growth in housing launches, with almost a million units launched during this period. As a result, the actively selling unsold housing inventory has reached approximately 468,000 units by March 2024, marking a 24% increase since December 2019. However, despite this surge in unsold inventory, there has been a remarkable reduction in the estimated time required to sell these properties.
“Interestingly, both the affordably priced (apartments priced up to INR 75 Lakh) and premium (apartments priced between INR 1.5 crore-3 crore) segments have seen a sharp decline of ~43% each in the time needed to sell their respective unsold inventory levels. While the fall in the former was due to its reducing share in launches over the last four years, the premium segment saw this decline despite a substantial jump in the segment’s share in annual launches - from ~2% in 2019 to 22% in 2023. In fact, time needed to sell the unsold inventory in the premium segment has dropped from 51 months in 2019 to 29 months in Q1 2024, showcasing the strong sales momentum in this segment. Apartments belonging to ticket size category of INR 3.0 crore and above, have also witnessed a 11% reduction in time to sell during the same time.” said Dr Samantak Das, Chief Economist and Head Research & REIS, India, JLL.
Among all price categories, it is noteworthy that the premium segment still takes the longest time to sell its unsold inventory, with an average of 29 months as of Q1 2024. However, despite this longer selling period, the premium segment has experienced a significant reduction in inventory liquidation time due to its relatively faster sales velocity. This segment has emerged as the top performer, driven by strong buyer interest in larger homes with improved support amenities.
“Time taken to liquidate the housing stock has declined across majority of the cities like Delhi NCR, Bengaluru, Kolkata, Mumbai, and Pune between December 2019 and Q1 2024. Delhi NCR has recorded the sharpest decline in terms of months to sell, coming down from 48 months to just 14 months. This can be attributed to robust sales in the premium and luxury segment in Delhi NCR with a lot of quality projects getting completely sold out within days of their launch. With anticipated momentum in the coming quarters, the months to sell for the available inventory are likely to decline further in the near to medium term.” said Siva Krishnan, Senior Managing Director (Chennai & Coimbatore), Head - Residential Services, India, JLL
