Homebuyers returning to residential market, taking advantage of favourable property prices: Report

Indian homebuyers are returning to the residential market and taking advantage of favourable property prices and cuts in GST and also home loan rates earlier this year, a report said. Residential inventory in the top 7 cities overhang plunged to worth of 30 months in the first quarter of 2019, against 50 months in the corresponding period in 2017, real estate consulting firm ANAROCK report said.

Housing sales recorded in Q1, 2017, were merely 46,000 units across the top 7 cities, while sales rose by a whopping 71 percent in two years to reach nearly 78,520 units in Q1, 2019.

Delhi/NCR has witnessed an unsold stock decrease by a significant 18 percent during this period, leaving the other 'heavyweight' market Mumbai Metropolitan Region (MMR) far behind. MMR cleared a mere 4 percent of its unsold inventory in the same period. In short, NCR has halved its unsold housing inventory overhang - from 90 months in Q1, 2017, to 45 months in Q1, 2019.

“Average property prices across cities have largely maintained status quo and saw less than 2% rise in the last two years – from INR 5,480 per sq. ft. in Q1 2017 to INR 5,570 per sq. ft. in Q1 2019. While the top 7 cities saw a cumulative drop of 16% in overall unsold housing stock in the last two years, Bengaluru saw the maximum decline. The city saw pent-up housing inventory reduce by a 44% – from nearly 1,18700 units in Q1 2017 to 66,820 units in Q1 2019. Hyderabad followed with a 21% decline in the same period,” said Anuj Puri, Chairman – ANAROCK Property Consultants.

The current housing inventory level stands at 6.65 lakh units across the top 7 cities - nowhere near the lowest level of 4.96 lakh units seen in 2013. However, the extremely worrisome trend of rising inventory since 2014 onwards has effectively been arrested, with data clearly suggesting a quarter-on-quarter unsold stock decline in the 7 main cities from Q1, 2017 onward. In the coming quarters, a stable government at the Centre will boost buyer confidence further and increase housing sales velocity, it said.