MMR had highest unsold luxury stock

Snapped up like hot cakes by investors in previous years, luxury housing sales are still in the doldrums and hinging largely on end-user sales.

Even after three years of demonetization, despite having the lowest share of overall unsold stock in the top 7 cities, it remains the worst-performing of all budget categories, writes Anuj Puri, Chairman of ANAROCK Property Consultants.

Unsold luxury stock had increased by 10% y-o-y in the top 7 cities by 2019-end, reveals ANAROCK data. There were 89,200 units of unsold luxury stock (homes priced >Rs.1.5 Crore) by 2019-end as against 81,290 units in 2018. Overall value of unsold luxury stock as on 2019 is estimated to be nearly Rs.1.59 lakh crore, which is 34% of total unsold stock value.

Overall unsold housing stock across different budget segments stood at 6.48 lakh units worth Rs.4.64 lakh crore in top 7 cities by 2019-end, declining by mere 4% since 2018.

On breaking down the unsold stock at the two extreme ends of the budget spectrum, it emerges that affordable homes comprised the maximum share at 36% while luxury homes had the least, with less than 14% share. Luxury developers have severely curtailed the supply pipeline, primarily due to the absence of investors in this segment.

Value of Unsold Luxury Stock as on 2019-en City (in Rs. crore):

Bangalore Rs.11,870 crore

Chennai Rs.5,730 crore

Hyderabad Rs.5,910 crore

Kolkata Rs.4,570 crore

MMR Rs.82,070 crore

NCR Rs.38,690 crore

Pune Rs.9,850 crore

Grand Total Rs.158,690 crore

Source: ANAROCK Research

Mid-segment homes priced between Rs.40-80 lakh shed the maximum unsold stock in 2019 by 15% – from nearly 2.27 lakh units in 2018 to approx. 2.02 lakh units in 2019-end.

Except Kolkata, all cities saw their unsold luxury stock increase in 2019:

Kolkata – in sharp contrast to other cities – saw a 10% decline in its unsold luxury stock, from 2,265 units as on 2018-end to approx. 2,050 units by 2019.

MMR did reasonably well – despite adding almost 11,250 luxury units in 2019, the region saw a mere 2% y-o-y increase in unsold luxury stock – from 48,040 units in 2018 to 48,970 units by 2019-end.

Hyderabad and Pune saw unsold luxury stock increase by a whopping 58% and 56% respectively during the period. Hyderabad’s pent-up luxury stock rose from 3,000 units in 2018 to nearly 4,740 units in 2019; in Pune, it increased from 2,750 units in 2018 to 4,290 units in 2019.

Chennai, unsold luxury stock increased by 33% in a year – from 2,480 units in 2018 to nearly 3,300 units by 2019-end.

NCR saw its unsold luxury stock increase by 17% in the period. The unsold luxury stock here was the second-highest after MMR with around 18,400 units by 2019-end.

Bangalore’s unsold luxury stock also increased by 6% – from 7,010 units in 2018 to 7,470 units by 2019-end.

Unsold Housing Stock: Budget-wise Performance

Of the total current unsold stock of nearly 6,48,400 units in the top 7 cities, affordable housing (priced <Rs.40 lakh) comprised the maximum share at about 36%, followed by 31% in the mid-segment (Rs.40-80 lakh). The share of unsold premium homes priced between Rs.80 lakh and Rs.1.5 crore was 19%, while luxury accounted for 14%.

Mid-segment homes shed over 15% unsold stock during the year – from 2,36,600 units in 2018-end to approx. 2,01,670 units by 2019-end. Bangalore and Hyderabad saw the maximum yearly stock decline of 37% and 34%, respectively.

Affordable housing, with the highest new supply in 2019, affordable homes saw unsold stock reduce by a marginal 1% – from 2,38,750 units in 2018 to 2,36,640 units by 2019-end.

Hyderabad, Kolkata, Chennai and NCR shed maximum unsold affordable stock – by 28%, 11%, 10% and 9%, respectively.

Unsold stock of premium homes priced from Rs.80 lakh to Rs.1.5 crore increased by 4% to 1,20,900 units as on 2019-end. fiinews.com