Inventory of under-construction properties slump in last seven years
Real Estate

Inventory of under-construction properties slump in last seven years

Axis Capital Limited has told the media that the inventory levels of under-construction properties in some of the major cities of India have dropped in the last seven years as fresh housing starts have lately trailed sales.

According to a report, Pune has emerged as India's best market in terms of volume, followed by Hyderabad, while Mumbai has been seen as the largest inventory drop.

In FY18-19, the beginning of the credit crisis expedited the consolidation and benefitted grade-A developers more. As the unsold inventory levels at under-construction properties drop, the developers are expected to step up launches again from FY23, said the report.

Pune city has emerged as the largest market with the lowest inventory, while material management resources (MMRs), especially Mumbai's inventory levels, declined by about half.

The duration of unsold inventory in Pune is nearly 15 months, according to which all housing units launched before have been sold. The inventory months of Mumbai dropped from 40 to 20 in the past five-six years, while the National Capital Region (NCR) still lagged on both the parameters.

Partner-Lead Advisory of Grant Thornton Bharat, Sumeet Abrol, said that from the onset of the Real Estate Regulatory Authority (RERA) in late 2018, it initiated the consolidation process in the industry, leading to more awareness and confidence of the project among the buyers. In the last few years, muted demand led to a decline in launching new projects in the market.

Developers are also eyeing selling under-construction properties instead of fresh housing.

Director of M3M India Private Limited, Pankaj Bansal, said that the company is focusing on under-construction properties, which is a very fast-moving segment for the company. It focuses on the timely delivery of the projects to the customers.

The inventory levels in major cities like Pune, Mumbai and Thane are at a decadal level. Bangalore is still above two years of inventory, but its primary sales have declined consistently.

Image Source


Also read: China’s Evergrande: On a brink of collapse

Axis Capital Limited has told the media that the inventory levels of under-construction properties in some of the major cities of India have dropped in the last seven years as fresh housing starts have lately trailed sales. According to a report, Pune has emerged as India's best market in terms of volume, followed by Hyderabad, while Mumbai has been seen as the largest inventory drop. In FY18-19, the beginning of the credit crisis expedited the consolidation and benefitted grade-A developers more. As the unsold inventory levels at under-construction properties drop, the developers are expected to step up launches again from FY23, said the report. Pune city has emerged as the largest market with the lowest inventory, while material management resources (MMRs), especially Mumbai's inventory levels, declined by about half. The duration of unsold inventory in Pune is nearly 15 months, according to which all housing units launched before have been sold. The inventory months of Mumbai dropped from 40 to 20 in the past five-six years, while the National Capital Region (NCR) still lagged on both the parameters. Partner-Lead Advisory of Grant Thornton Bharat, Sumeet Abrol, said that from the onset of the Real Estate Regulatory Authority (RERA) in late 2018, it initiated the consolidation process in the industry, leading to more awareness and confidence of the project among the buyers. In the last few years, muted demand led to a decline in launching new projects in the market. Developers are also eyeing selling under-construction properties instead of fresh housing. Director of M3M India Private Limited, Pankaj Bansal, said that the company is focusing on under-construction properties, which is a very fast-moving segment for the company. It focuses on the timely delivery of the projects to the customers. The inventory levels in major cities like Pune, Mumbai and Thane are at a decadal level. Bangalore is still above two years of inventory, but its primary sales have declined consistently. Image SourceAlso read: China’s Evergrande: On a brink of collapse

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