Realty demand: Home stock sells faster in Kolkata

KOLKATA: The city’s residential inventory overhang, or the time projected to sell the homes in stock at the current absorption rate, has more than halved in five years, a reflection of the surge in demand brought about by the onset of the pandemic in 2020 and financial incentives from the state.
According to an analysis of inventory overhang released by real estate consultants Anarock, Kolkata has the second lowest among the top seven cities at 20 months, along with Pune and Chennai. Only Bengaluru has a better record of only 13 months’ inventory overhang.
Inventory measured in months indicates the number of months it will take for the current unsold housing stock on the market to sell at the current absorption rate. An inventory overhang of 18-24 months is normally considered healthy at any given period.
Kolkata’s inventory overhang has dropped from 46 months in January-March 2018 to 20 months in the same period this year. It was the third highest reduction after NCR and Mumbai metropolitan region. The reduction in inventory overhang has been aided by the surge in demand owing to the realisation about the need to upgrade one’s home — from a rented property to an owned one, and from a small unit to a bigger one. This was aided by the Bengal government reducing stamp duty and circle rate from July 2021 that incentivised purchase and registration.
In the 18 months from July 2021 to February 2023, over 83,164 residential homes were registered since the introduction of the scheme, up 76% from the previous 18 months from January 2020 to June 2021 when 47,317 homes had been registered. While Bengaluru has the least inventory overhang at 13 months, NCR recorded the highest reduction in five years from 66 months in the first quarter of 2018 to 23 months in the corresponding period this year.
The inventory overhang of Mumbai metropolitan region has also reduced to 21 months from 55 months in Q1 2018.
The cumulative unsold stock in the top seven cities declined by 12% in the last 5 years — from 7,13,400 units by Q1 2018-end to around 6,26,750 units by Q1 2023-end. “In January-March 2023, the top seven cities recorded all-time high sales of more than 1.1 lakh units,” said Anarock group chairman Anuj Puri. “The quarter broke records and breached the 1 lakh-unit mark for the first time. Strong homeownership sentiment, relatively lower home loan rates, strong momentum in luxury housing, and anticipation of further price hikes were factors in boosting housing sales, bringing down the overall residential inventory overhang across the top cities,” he added.