Luxury housing market witnessed inventory pile-up in 2019: Anarock

Hyderabad, Kolkata, Chennai and the NCR shed the maximum unsold affordable stock last year.

The market scenario in luxury housing segment during 2019 was identical to the other segments – affordable, mid-size and premium – in the residential space. A stagnant market, coupled with little interest from buyers, led to an inventory build-up in residential, which stretched to the luxury housing market as well. Houses in this space carry a price tag of more than Rs 1.5 crore per unit.

According to Anarock Property Consultants, the unsold stock in luxury segment rose 10% Y-o-Y in the top seven cities by end of 2019. There were 89,200 units of unsold stock as on December 2019, against 81,290 units a year-ago.
“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 demonetisation, despite having the lowest share of overall unsold stock in the top seven cities, it remains the worst performing of all budget categories,” Anarock chairman Anuj Puri said.

The Mumbai Metropolitan Region (MMR), which has the highest unsold luxury stock share at 55% (around 48,970 units), saw its yearly unsold stock increase by 2%, the lowest among top seven cities. However, barring Kolkata, all the top cities saw their unsold luxury stocks rise in 2019. In Kolkata, unsold stock fell 10% Y-o-Y, from 2,265 units by 2018-end to around 2,050 units by 2019.

On the other hand, Hyderabad recorded the highest jump of 58% in unsold stock, from 3,000 units in 2018-end to 4,740 units by 2019-end. Pune, like Hyderabad, saw its unsold inventory rise significantly during 2019. Its unsold stock of luxury apartments rose 56% Y-o-Y, from 2,750 units in 2018 to 4,290 units last year.

In Chennai, the unsold luxury stock rose 33% in a year – from 2,480 units in 2018 to nearly 3,300 units by 2019-end. The Delhi NCR saw its stock increase 17% Y-o-Y in the same period. Its unsold luxury stock was the second-highest after the MMR with around 18,400 units by 2019-end. Bengaluru’s unsold luxury stock increased 6% annually from 7,010 units in 2018 to 7,470 units by 2019-end.

“Overall, the unsold housing stock across different budget segments stood at 6.48 lakh units in top seven 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,” Puri said.

Affordable housing, with the highest new supply in 2019, saw unsold stock reduce by 1%, from 2.39 lakh units in 2018 to 2.37 lakh units by 2019-end. Hyderabad, Kolkata, Chennai and the NCR shed the maximum unsold affordable stock last year.

Mid-segment homes shed over 15% unsold stock during 2019, from 2.37 lakh units in 2018-end to close to 2.02 lakh units by 2019-end. Bengaluru and Hyderabad saw the maximum yearly stock decline of 37% and 34%, respectively, in this space.