Sales Fly In Q2 2024, With Housing Inventory Overhang At A Record Low Of 22 Months

Unsold inventory across the top 8 cities at the end of June 2024 was 9.26 lakh residential units; strong sales momentum is expected to last throughout the holiday season.

The term "housing inventory overhang" describes the projected amount of time, based on current sales velocity, needed to sell unsold residential units in a market. This measure is essential for evaluating the situation of the real estate market since it shows higher market performance when there is less inventory overhang.
 

Top 8 Cities Performance In Q2 2024
 

• Ahmedabad

Property in Ahmedabad stands out of the eight markets examined, saw the biggest decrease in inventory overhang, going from 33 months in 2023 to just 18 months in Q2 2024. This amounts to a decrease of more than 12,500 units each year. Strong demand is boosting the city's real estate market, particularly for mid-range and affordable homes, which is assisting developers in quickly clearing off unsold inventory.

Developers' well-balanced approach, which has been careful in introducing new projects to ensure that the market does not become oversupplied, is credited with this dramatic reduction. The favorable trend in Ahmedabad’s real estate market is projected to continue in the second half of the year, propelled by a growing industrial and commercial base that is fueling housing demand.
 

• Delhi-NCR

Property in Delhi achieved significant progress in cutting its inventory overhang, which by the end of June 2024 had decreased from an astounding 72 months in 2023 to just 31 months. Year over year, the city recorded a decrease of more than 9,400 unsold apartments. The improvement can be attributed to a notable rebound in the property market of the area, which was previously beset by an excess of opulent properties.

Delhi-NCR developers are now concentrating on building more reasonably priced and mid-range homes in order to serve the expanding middle class. Faster sales and a better market absorption rate are the results of this strategic change. There are still difficulties, though, especially in the higher-end markets where demand is still modest.
 

• Mumbai Metropolitan Region (MMR)

High levels of unsold housing stock remain a problem for the Mumbai Metropolitan Region (MMR), even in spite of general good market trends. 3,39,362 unsold units, or 54% of the total unsold inventory across the top eight markets in India, were accounted for by MMR as of Q2 2024. The ongoing introduction of new projects by developers in response to consistent demand from investors and end users has resulted in a significant inventory overhang in MMR.

High-end and luxury property in Mumbai is still in high demand, although sales are moving more slowly due to the sheer number of new projects being released. It will take some time for the market to absorb this stock 28 months of overhang even though holiday sales are anticipated to increase.
 

• Pune

As of June 2024, there were 1,57,555 unsold units available in Pune, another area where unsold stock is very high. Similar to MMR, the high number of newly launched projects in Pune has resulted in a 1% year-over-year increase in unsold inventory. Pune is now experiencing a 24-month inventory overhang, which is indicative of a slower rate of absorption than other cities.

Nonetheless, Pune's mid-range and inexpensive housing markets are still doing well because of the city's expanding IT industry and industrial base, which are driving up demand for real estate. Building companies are concentrating on customizing their newest endeavors to satisfy the tastes of young professionals and first-time homeowners.
 

• Bangalore

The property in Bangalore has a reputation for being somewhat steady, and in Q2 2024, this tendency held true. With 81,153 unsold units remaining, the city's inventory overhang decreased from 36 months in 2023 to 18 months in Q2 2024. The city's booming IT industry and the steady demand for residential homes in a range of price points including inexpensive, mid-range, and premium housing support this balanced market.

The developers in Bengaluru have continued to launch new products cautiously, making sure that supply does not surpass demand. As a result, the market has remained balanced and developers have been able to move unsold inventory at a consistent pace.
 

• Hyderabad

Property in Hyderabad saw a decrease in the overhang in inventories from 39 months in 2023 to 26 months in Q2 2024. With 1,32,178 units available, the city still has a sizable amount of unsold inventory. Hyderabad's reputation as a major IT hub and a hub for global firms has contributed to the city's recent strong growth in the real estate market.

To accommodate the expanding population of the city, Hyderabadi developers have been eager to start new projects; nonetheless, this has resulted in an oversupply in some areas. Even with the robust demand, especially for mid-range housing, the market will require more time to clear out the current unsold inventory.
 

• Chennai

The inventory overhang of property in Chennai decreased somewhat from 28 months in 2023 to 24 months in Q2 2024. There are presently 34,000 or so unsold units in the city. Chennai's housing market has not seen the same rapid absorption rates as Ahmedabad or Bengaluru, despite the city's sustained housing demand, especially in the mid-range category.

Chennai's middle-class populace has demands for affordable homes, hence developers are concentrating on smaller projects in the area. Although the inventory overhang is being steadily reduced with this technique, the rate of absorption is still slower than in other key markets.
 

Conclusion

The record-low inventory overhang in Q2 2024 is proof that the supply and demand dynamics in India's real estate industry are improving. The biggest gains have been seen in Bengaluru, Delhi-NCR, and Ahmedabad; excessive amounts of unsold stock continue to be a problem in Mumbai, Pune, and Hyderabad. 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.

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