Rapid Liquidation of Unsold Housing Inventory in Bengaluru and Delhi NCR; JLL Report

The Indian residential real estate market has seen significant improvements in recent years, particularly in the rate at which unsold housing inventory is being liquidated. According to a recent report by JLL, Bengaluru and Delhi NCR are leading this trend, requiring the least amount of time to sell their unsold inventory.

Decrease in Liquidation Time

Across India’s top seven cities—Delhi NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, and Kolkata—the average time to sell unsold housing inventory has dropped by 31% since 2019. This period has decreased from 32 months to 22 months by the end of Q1 2024. The driving force behind this trend is a significant surge in housing demand, with nearly a million units launched in the past five years.

City-Specific Performance

Bengaluru: The Leading Market

Bengaluru has emerged as the city with the shortest time required to sell unsold inventory, taking just 13 months as of March 2024. This rapid turnover highlights the city's strong market dynamics and robust demand for residential properties.

Delhi NCR: Remarkable Improvement

Delhi NCR follows closely with a 14-month liquidation period. The region has shown the most significant improvement, reducing its time to sell from 48 months in 2019 to just 14 months in Q1 2024. This dramatic reduction is attributed to robust sales in the premium and luxury segments.

Other Major Cities

Chennai also shows a notable performance, taking 20 months to sell its unsold inventory. This is indicative of a healthy demand and efficient market operations in the city.

Segment Analysis

Premium Housing Segment

The premium housing segment, which includes apartments priced between ₹1.5 crore to ₹3 crore, traditionally takes the longest to sell. However, there has been a significant reduction in the time needed to sell these properties, from 51 months in 2019 to 29 months in Q1 2024. This improvement is driven by strong buyer interest in larger homes with enhanced amenities.

Affordable Housing Segment

The affordably priced housing segment, consisting of apartments priced up to ₹75 lakh, has also seen a sharp decline in liquidation time, with a 43% reduction over the last four years. This decrease is partly due to a reduced share in new launches, which has helped balance supply and demand.

Factors Driving Market Dynamics

Increased Housing Demand

The overall increase in housing demand has been a significant factor in reducing the time to sell unsold inventory. By March 2024, the actively selling unsold housing inventory had reached approximately 468,000 units, a 24% increase since December 2019. Despite this surge, the time required to sell these properties has notably reduced.

Strategic Launches

The consistent growth in housing launches, with nearly a million units launched in the past five years, has played a crucial role in meeting the rising demand. This strategic approach has helped in maintaining a balanced market.

Future Outlook

Industry experts anticipate that the momentum observed in the premium and luxury segments will continue, further reducing the time needed to sell available inventory in the near to medium term. This positive trend underscores a healthy market dynamic driven by strong demand and strategic launches.