'Unsold stock hints at recovery of affordable housing'

Bengaluru: Affordable housing (those priced below Rs 40 lakh) took a beating in the post-pandemic years with buyers in this segment adopting a cautious approach.

But this may be changing, given that the unsold inventory of affordable housing fell by 19 per cent across the top seven cities in the January-March quarter (Q1) of 2025, according to a report by Anarock out on Monday.

While this hints at sustained demand by end-users, the primary reason for this is less supply as large developers continue shifting their focus to the premium and luxury segments. Also, because of constantly rising prices in the mid-range segment, many buyers in that segment are now exploring affordable housing options, Anarock told DH.

In fact, Bengaluru led the affordable category upturn with a sharp 51 per cent drop in its unsold stock, followed by Chennai's 44 per cent decline. Hyderabad was the only city to witness a 9 per cent surge in its affordable housing stock in the period.

The unsold inventory in the top cities in the segment went from 1.4 lakh units (Q1 2024) to 1.13 lakh units (Q1 2025). This hints at sustained demand by end-users, as per Anarock.

On the other hand, luxury housing (over Rs 1.5 crore), which has been seeing a big boom, actually saw a 24 per cent rise in unsold stock from 91,125 units (Q1 2024-end) to over 1.13 lakh units (Q1 2025-end), due to new supply. 

"The segment saw unsold inventory pile up due to increased supply and cautious investor sentiment amid the ongoing global economic uncertainty," said Anuj Puri, Chairman - Anarock Group.

"The build-up of stock in luxury housing, which has been the top-performing segment in the past 2-3 years, is largely due to significant supply additions in the last one to two years," Puri added.

Chennai and Pune were the only cities to see their unsold luxury stock decline in the period, by 4 per cent and 11 per cent, respectively.

Other categories such as unsold mid-segment housing (priced Rs 40 - 80 lakh) stock also declined annually by 10 per cent.

Overall unsold stock across all budget categories shrunk by 4 per cent in Q1 of 2025, in the top cities to 5.6 lakh units.