Year 2021 saw not only record absorption but the inventory level with the realtors also depleted to a decadal low. This trend of lower inventory levels may continue in 2022 also unless there are substantial jump in new launches in the current calendar year.
Year 2021 is slated to be the best year for absorption across residential real estate in over a decade as the top 7 cities recorded 362msf of absorption in first 11 months of the year. Moreover, unsold inventory of the industry is expected to be at a decadal low with 571msf of unsold inventory across top 7 cities. Real estate analysts expect this trend to continue in CY22 as launches continue to lag sales, resulting in declining inventory.
A combination of factors like stamp duty cut in some states like Maharashtra, low home loan rates, developers offering schemes, rising need for larger homes and anticipation of price hikes by customers have driven the current demand for homes.
All markets (Bangalore, Chennai, MMR, Delhi-NCR, Pune and Kolkata) barring Hyderabad have shown a declining trend in inventory for CY21. Pune remains one of the best performing markets with inventory less than 15 months which is partly due to stamp duty cut. Mumbai’s large ticket sized inventory (Rs 5 crore and above) has declined by 19% to Rs 73200 crore (Rs 90000 crore in CY19). Meanwhile, Gurgaon market is improving with higher launches and absorptions. Further, the ready to move in (RTMI) inventory also continues to decline sharply (down to Rs 49000 crore as against Rs 80300 crore in CY19) across markets thereby releasing cash flows for developers.