This is the best time for Developers as the enthusiasm of consumers is pumping a high amount of money. Which further strengthens the sales of Real Estate and provides high sales value.
A big Real Estate News shows that after the gloomy days of the pandemic, the Real Estate market of India is again on the Boom. After an era of bad Real Estate Days due to some fraudulent developers. Sale of houses in top 8 cities has reached the highest point in quarters of 6 years, this Q3, According to a report by Knight Frank. Some other reports also suggest an increase in inventory levels.
This year Indian Real Estate News shows that the Real Estate inventory has reached a 28 percent high year-on-year high in the first half. The cumulative value of unsold inventory of listed companies to a whopping 1 lakh crore. The amount is equivalent to 33 months of sales if things go at the current pace. Most of the products in the inventory belong to upcoming projects which is a major opportunity.
Although the inventory is at a record, a lot of pockets in the same country have unsold homes on a steep decline. In the second quarter, the number of unsold homes in tier 1 cities was 526,000 which dropped to 508,000 in the third quarter. In the area around New Delhi, Noida, and Gurugram, which is called the National Capital Region, there’s been a 7% decrease in homes that haven’t been sold yet. Builders are focusing on selling older homes first and are starting fewer new projects. This is happening in the Indian real estate market.
In the last year, there has been a change in the trend of decreasing housing stocks that lasted for 10 years until 2022. The increase is because developers are launching new projects more actively, though there’s only a limited amount of older homes available, as explained by Vivek Rathi, the national director of research at Knight Frank India. Right now, the market has enough inventory to last less than two years, suggesting that projects are getting sold even before they’re finished, giving confidence to developers, according to Rathi.
In the real estate sector, the nine top developer companies have seen a significant increase in gross sales over the past few years. Their sales went from Rs 18,000 crore in FY17 to Rs 68,000 crore in FY23, as reported by ICICI Securities. Jones Lang LaSalle (JLL) also mentioned that the third quarter of CY23 had the highest residential sales in a quarter since 2008. Residential sales in the first nine months of 2023 have already reached 91 percent of the sales in CY22, showing signs of recovery despite higher mortgage rates.
Despite the increase in unsold homes, the time it takes to sell them has decreased from 2.5 years in Q2 of 2023 to 2.3 years in Q3 of 2023, indicating strong sales, according to the JLL report. Ashish Khandelia, founder of Certus Capital and Earnnest.me, mentioned that considering the gross sales of Rs 68,000 crore in FY23 by listed players, having an inventory of over Rs 1 lakh crore doesn’t seem to be a major concern.
