Despite spiralling Covid-19 cases in the second quarter of FY21, residential sales have improved significantly resulting in a reduction in unsold inventory.
The top 8 residential markets in the country including Bengaluru have seen 12% reduction in unsold inventory at 7.23 lakh units as of September 2020 compared to 8.23 lakh units a year ago. Bengaluru alone has seen 10% year-on-year reduction in unsold inventory during this period. It currently stands at 72,754 units compared to 80,942 units in Q3 2019.
According to data compiled by online property platform PropTiger.com, it will take approximately 36 months for developers to liquidate the current stock.
“In Bengaluru, sales are returning to almost pre-Covid levels for large builders, while small players continue to see lack of sales. The new launches have been muted during the last two quarters, which helped in clearing some unsold inventory,” Rajendra Joshi, CEO-Residential, Brigade Enterprises told DH.
Low interest rates and some concessions like relaxed payment terms offered by large builders helped buyers to make their purchases during the last quarter, he said.
Koshy Varghese, Managing Director, Value Designbuild Pvt Ltd said: “A slew of freebies offered by builders helped in clearing some inventory during the last few months. There were not many new launches in the first two quarters this year because the builders preferred to complete their existing projects. Also, the homebuyers were looking for ready houses especially premium homes rather than wait for new projects.”
The PropTiger.com research reveals that limited sales will happen driven by fence-sitting end-users, who will drive bargains and avail benefits of reduced interest rates and developer schemes and discounts.
“New supply has been faltering due to the double whammy of credit crunch and sluggish sales, and the scenario will continue in the near term,” Dhruv Agarwala, Group CEO, PropTiger.com said.
Trends suggest prices will continue to move in the current range. However, discounts and bargains will be available on a case to case basis.
A majority of the developers continued to be under pressure from unavailability of construction workers as well as liquidity crunch due to sluggish sales. Also, difficulty to raise capital in the current times has restrained many developers to launch new projects and focus on completing their existing inventories.
On a year-to-date comparison (January-September) 2020, new units launched declined by 65% as compared to the same period in 2019. During the third quarter of 2020, demand exceeding new supply across the top cities has slightly reduced the unsold inventory by 2% over the previous quarter. Except Hyderabad, all the other cities witnessed a reduction in unsold inventory in the range of 1-5% as compared to the previous quarter.
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