Real Estate

Luxury housing remains in doldrums; unsold stock up 10% in top 7 cities

Anil Urs Bengaluru | Updated on January 30, 2020

luxury houses

Amid poor investor interest, luxury developers severely curtail supply pipeline

Snapped up by investors in the previous years, luxury housing sales are now in the doldrums, hinging largely on end-user sales. “Even three years after demonetisation, despite having the lowest share of overall unsold stock in the top seven cities, it remains the worst-performing of all categories,” said Anuj Puri, Chairman, Anarock Group.

Unsold luxury housing stock had increased 10 per cent year-on-year (YoY) in the top seven cities by 2019-end, reveal Anarock data. There were 89,200 units of unsold luxury stock (homes priced ₹1.5 crore or more) by 2019-end, against 81,290 units in 2018. The overall value of unsold luxury stock as of 2019-end is estimated at ₹1.59-lakh crore, which is 34 per cent of the total unsold stock value.

According to Puri, overall unsold housing stock across different budget segments stood at 6.48 lakh units worth ₹4.64-lakh crore in the top seven cities by 2019-end, declining by a mere 4 per cent YoY. 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 per cent, while luxury homes had the least, at less than 14 per cent. Luxury developers have severely curtailed the supply pipeline primarily due to the absence of investors in this segment.

Mid-segment homes, priced at ₹40-80 lakh, shed the maximum unsold stock in 2019 — by 15 per cent, from nearly 2.27 lakh units in 2018 to about 2.02 lakh units in 2019.

Unsold luxury stock, city-wise

Kolkata — in sharp contrast to other cities — saw a 10 per cent decline in its unsold luxury housing stock, from 2,265 units in 2018 to about 2,050 units in 2019.

Mumbai (MMR) did reasonably well. Despite adding almost 11,250 luxury units in 2019, the region saw a mere 2 per cent YoY increase in unsold stock, from 48,040 units in 2018 to 48,970 units in 2019.

Hyderabad and Pune saw unsold luxury housing stock increase by a whopping 58 per cent and 56 per cent, respectively, during the period. In Hyderabad, it rose from 3,000 units in 2018 to nearly 4,740 units in 2019; in Pune, it increased from 2,750 units to 4,290 units.

In Chennai, unsold luxury housing stock increased by 33 per cent, from 2,480 units in 2018 to nearly 3,300 units in 2019.

NCR saw its unsold luxury stock increase by 17 per cent. At 18,400 units in 2019, its stock was the second-highest, after MMR.

Bengaluru’s unsold luxury housing stock increased by 6 per cent, from 7,010 units in 2018 to 7,470 units in 2019.

Published on January 30, 2020

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