National Capital Region (NCR) and Mumbai Metropolitan Region (MMR), the two major markets in the country, have experienced hitherto unprecedented growth across the board over the last five years. According to ANAROCK Research, the average residential prices of NCR in H1 of 2019 surged 49 per cent to reach INR 6,800 per sq. ft. from INR 4,565. MMR have witnessed a 48 per cent rise in average residential prices in three years—from INR 10,610 per sq ft in H1 2014 to INR 15,650 per sq ft in H1 2017.
The various reasons for the steep rise in housing prices include escalated construction costs and robust sales. According to Anuj Puri, chairman of the ANAROCK Group, prices in both regions had maintained the status quo from late 2016 to 2019. Just when these two markets were beginning to see green revival shoots, the pandemic struck.
NCR, known for its high unsold inventory, driven large by speculative demand and supply, has steeply fallen in its unsold stock by over 52 per cent in the last five years. While unsold stock in the region has come down from about 1.82 lakh units at the end of H1 2019 to about 86,900 units by the end of H1 2024, the inventory overhang has also come down drastically from 44 months in H1 2019 to just 16 months in H1 2024. It is the result of a combination of fresh supply, with just about 1.72 lakh units launched between H1 2019 and H1 2024, and insatiable demand.
As of date, the currently available stock is almost 1.95 lakh units in MMR, an absolute 13 per cent lower than the stock of unsold units noted 5 years ago. The need for new launches is a huge factor behind this steep fall in unsold stock, partly to cater to resurgent demand. MMR has seen more than 5.26 lakh units launched between H1 2019 and H1 2024, which is three times the new supply witnessed in NCR during the same period. Inventory overhang in MMR has come down from 34 months at the end of H1 2019 to 14 months as of H1 2024-end.
While the NCR reached sales of around 2.72 lakh units, MMR recorded sales of 5.50 lakh units between H1 2019 to H1 2024 according to the data. The spurt in housing sales— along with the reduction in unsold inventory, has been a strong factor in the price appreciation witnessed in both cities.
