New Delhi, April 7 (IANS) Housing units worth Rs 3.7 lakh crore remain unsold across the top seven cities in the country as of March-end, according to a JLL report.
The report titled ”India Residential Market Update Q1-2020” noted that the first quarter of 2020 witnessed an increase in unsold inventory as launches outpaced sales by a significant margin.
Unsold inventory increased from 4,42,228 units in the fourth quarter of 2019 to 4,55,351 units in the first quarter of 2020. Further, Mumbai surpassed Delhi-NCR with the maximum quantum as well as value of unsold inventory, as per the report.
It said an assessment of years to sell (YTS) reveals that the expected time to liquidate this stock has increased marginally from 3.2 years in the last quarter of 2019 to 3.3 years in Q1 2020. With anticipated slower sales in the coming quarters, the time to sell is likely to increase.
“The duration to monetise the existing inventory of around 4,55,000 units is expected to extend. Resultantly, developers will have to sit on this unsold inventory worth Rs 3,70, 000 crore for a relatively longer duration,” the report said.
It noted that the Reserve Bank of India”s (RBI) intervention to provide a three-month moratorium on all term loans by financial institutions will alleviate short-term liquidity concerns and help developers survive in these uncertain times.
Sales declined by 30 per cent in the first quarter of 2020 on a year-on-year basis as the homebuyer community deferred their purchase decisions due to the evolving COVID-19 outbreak
However, new project launches came to a standstill in March, Q1 2020 witnessing a rise of only 3 per cent in new launches as compared to the same period last year. The first quarter of 2020 recorded new launches of 40,574 units.
“The COVID-19 pandemic is expected to weaken the GDP growth, which is expected to fall below 5 per cent in FY 19-20 and potentially reach 2008-09 levels in FY 20-21. However, the residential real estate market appears to be at an advantageous position today as compared to the global financial crisis, led by a series of structural reforms by the government in the past five-to-six years,” said Ramesh Nair, CEO & Country Head, JLL.