The Indian residential property market held its own in 2021, with sales rebounding to more than 90% of the pre-pandemic 2019 levels. Resultantly, the housing inventory overhang across the top 7 cities plunged to 32 months by 2021-end, closing in on the 30 months reading by 2019-end. ANAROCK data shows that the inventory overhang in the top 7 cities stood at 55 months by 2020-end.
Inventory measured in months indicates the number of months it will take for the current unsold housing stock on the market to sell at the current absorption rate. An inventory overhang of 18-24 months is considered relatively healthy at any given period.
Anuj Puri, Chairman – ANAROCK Group, says, “Among the top 7 cities, NCR remained the frontrunner in reducing overall inventory in the last one year from 89 months in 2020 to 49 months in 2021. It is close to reaching the pre-pandemic levels of 45 months in 2019-end.”
“In 2021, the top 7 cities recorded sales of approx. 2.36 lakh units”, says Puri. “Housing sales in the 4th quarter (Oct.-Dec.) broke all records of the last 28 quarters (6 years) and breached the 90,000 units mark. Factors like positive homebuyer sentiment, all-time low home loan rates, and anticipation of imminent price hikes helped housing sales touch a new high, bringing down overall residential inventory overhang across the top cities.”
Factoring in the current housing sales momentum and guarded new supply across cities, the overall inventory overhang may reduce further in the coming quarters – if a high-impact third COVID-19 wave does not break the pace. Currently, the impact is minimal, with fewer hospitalizations and a reduced mandatory quarantine period of just 7 days against the previous 14 days.