Unsold housing stock in India’s mega housing markets has declined significantly due to strong sales momentum, driven by strong housing demand. Economic Survey 2022-23, The unsold inventory at the end of 2022 stood at 8.5 lakh, with 80% of the stock under various stages of construction, said the survey citing PropTiger data.
Citing PropTiger data tabled in the Lok Sabha on January 31, 2023, by Finance Minister Nirmala Sitharaman, the survey also said that the inventory overhang during the October-December period of 2022 reduced to 33 months, the same as last year. The same period was 42 months.
For starters, inventory overhang is the estimated time developers are likely to sell their existing stock factoring in current sales velocity.
Screenshot of PropTiger data showing in PDF format of Economic Survey 2022-23
“With 80% of the stock under various stages of construction, the unsold inventory at the end of 2022 stood at 8.5 lakh. This comes on the back of sustained sales momentum as the sector continues to recover from the impact of the pandemic,” said the survey.
“The improvement in sales in 2022 has been instrumental in reducing the inventory burden for India’s real estate developers. As a result, inventory overhang – the estimated time it will take builders to sell existing unsold stock based on current sales velocity – has come down to 33 months now, compared to 42 months in 2021. Inventory overhang is the lowest since 2020,” PropTiger said in its December 2022 quarterly report.
“Going forward, recent government measures, such as reduction in import duties on steel products, iron ore and steel intermediates, will reduce construction costs and help contain housing price increases,” the survey said.
