Selling time for unsold inventory reduced by 31% to 22 months Vs 2019: JLL

The residential sector in India's top seven cities has experienced a significant boost, with the time required to sell active unsold housing inventory dropping by 31 per cent since 2019, according to JLL's latest analysis.

As of Q1 2024, the average time to liquidate inventory stands at just 22 months, down from 32 months at the end of 2019, primarily driven by a surge in housing demand.

This notable reduction in selling time is observed despite an increase in unsold inventory, which reached approximately 468,000 units by March 2024, marking a 24 per cent rise since December 2019.

The steady growth in launches of new units, nearly a million units in the past five years, underscores the resilience of the residential sector.

Both the affordable (priced up to INR 75 lakh) and premium (priced between Rs 1.5 crore and 3 crore) segments have seen a significant reduction of around 43 per cent in the time needed to sell their unsold inventory.

The affordable segment's decline is attributed to a reduction in its share of launches over the past four years. Conversely, the premium segment saw a dramatic increase in its share of annual launches, from 2 per cent in 2019 to 22 per cent in 2023.

The time to sell premium segment inventory has dropped from 51 months in 2019 to 29 months in Q1 2024, highlighting strong sales momentum.Apartments priced at Rs 3 crore and above have also seen an 11 per cent reduction in selling time during the same period.

Dr. Samantak Das, Chief Economist and Head of Research & REIS at JLL India, said, "Interestingly, both the affordably priced (apartments priced up to INR 75 Lakh) and premium (apartments priced between INR 1.5 crore-3 crore) segments have seen a sharp decline of ~43 per cent each in the time needed to sell their respective unsold inventory levels.

He further said, "While the fall in the former was due to its reducing share in launches over the last four years, the premium segment saw this decline despite a substantial jump in the segment's share in annual launches - from ~2 per cent in 2019 to 22 per cent in 2023. In fact, time needed to sell the unsold inventory in the premium segment has dropped from 51 months in 2019 to 29 months in Q1 2024, showcasing the strong sales momentum in this segment."

"Apartments belonging to ticket size category of INR 3.0 crore and above, have also witnessed a 11 per cent reduction in time to sell during the same time", added Das.

Among the cities, Bengaluru and Delhi NCR require the least time to sell their current active unsold inventory, with Bengaluru leading at 13 months and Delhi NCR at 14 months.Hyderabad, on the other hand, may take the longest to liquidate its unsold inventory, requiring an average of 48 months.

Time to Sell Unsold Inventory by City as of March 2024 - Bengaluru (13 months), Chennai (20 months), Delhi NCR (14 months), Hyderabad (48 months), Kolkata (15 months), Mumbai (29 months), Pune (16 months), Total (22 months).

Delhi NCR has shown the most significant improvement, with the time to sell unsold inventory dropping from 48 months in December 2019 to just 14 months by Q1 2024.

This sharp decline is attributed to robust sales in the premium and luxury segments, with quality projects often selling out within days of their launch.

Siva Krishnan, Senior Managing Director (Chennai & Coimbatore) and Head of Residential Services at JLL India, commented, "Time taken to liquidate the housing stock has declined across majority of the cities like Delhi NCR, Bengaluru, Kolkata, Mumbai, and Pune between December 2019 and Q1 2024. 

Delhi NCR has recorded the sharpest decline in terms of months to sell, coming down from 48 months to just 14 months." he added, "This can be attributed to robust sales in the premium and luxury segment in Delhi NCR with a lot of quality projects getting completely sold out within days of their launch.

With anticipated momentum in the coming quarters, the months to sell for the available inventory are likely to decline further in the near to medium term."

The overall housing market in India's major cities continues to show strong growth, driven by high demand and robust sales momentum, particularly in the premium segment.With anticipated economic stability and potential growth in the real estate sector, the time required to sell unsold inventory is likely to decline further, ensuring a healthy market environment for both buyers and developers.