Unsold stocks drops by 11% in top 9 cities: PropEquity study

The unsold housing inventory in Tier 1 cities of India fell 11 per cent to 5,08,464 units in Q3 2023 against 5,26,497 units in Q3 2022, according to a research by real estate data and analytics platform PropEquity.

The research data highlights that Hyderabad witnessed a 6 per cent increase in unsold stock in Q3 2023 among the top seven cities in the country. In contrast, the Delhi-NCR region saw a 7 per cent reduction in unsold stock in the third quarter of 2023 compared to Q2 2023, while residential property sales continued to rise, maintaining the momentum gained after the pandemic.

"Housing prices in major Indian cities have been on the rise in the post-COVID years. This trend is attracting investors to India's key real estate markets, but challenges in housing demand persist due to property price appreciation and higher mortgage rates. If home loan interest rates remain stable or decrease in the coming months, we anticipate an increase in housing demand," said Samir Jasuja, Founder & CEO of PropEquity.

However, new property launches in Tier 1 cities increased by 2 per cent to 97,871 units in July to September 2023, compared to 96,408 units in the previous year. However, this quarter witnessed an 11 per cent decline in new launches on a quarter-on-quarter basis due to reduced demand resulting from increased property prices and mortgage rates. Indian developers are strategically focusing on reducing older unsold inventory while launching fewer new projects.

Ankush Kaul, Chief Business Officer at Ambience Group, said, “Despite rising interest rates and slightly higher property prices, the real estate market in India continues to exhibit robust consumer sentiment. There remains a balance between prices and affordability, and sales volumes are expected to remain strong. India has managed to navigate global economic challenges well so far and is likely to limit the impact of recessionary pressures moving forward, especially with the upcoming festive season anticipated to boost sales.”

The Bull Run in the real estate market, initiated in 2022, continues into 2023. Analysis of the first three quarters reveals that new property launches in Tier 1 cities are consistent with 2022 levels. Notably, there is an unprecedented surge in demand, reaching a decade-high of 5 lakhs, with an 8 per cent increase in absorption compared to the previous year. Pune, Hyderabad, Thane, including Kalyan, Bhiwandi, Panvel, and Vasai, have emerged as leaders in both new launches and absorption over the past two years. The evolving real estate landscape promises ongoing opportunities for developers and buyers in the coming months.

As the festive season approaches in the next quarter, the real estate market is poised for a surge in new property launches. The years 2022 and 2023 are historic milestones for real estate in Tier 1 cities across India, driven by investor and end-user confidence in tangible assets, particularly in the post-COVID era. Regulatory reforms introduced in 2017 have also played a crucial role in instilling confidence among investors and buyers, contributing to the current all-time high levels of supply and absorption. These figures underscore the renewed faith in the real estate sector, reflecting a robust and resilient market.

PropEquity Analytics, which owns and operates PropEquity, is an online real estate data and analytics platform, covering over 1,50,000 projects by more than 45,000 developers across more than 44 cities in India, with over 15 years of cataloged data.