Delhi, Mumbai housing prices up 49%, unsold inventory down
India's National Capital Region (NCR) and Mumbai Metropolitan Region (MMR), have experienced a substantial increase in housing market activity over the past five years, as per ANAROCK, a real estate consultant. The firm's research data reveals that record-breaking sales have resulted in a decrease in unsold inventory, and an average residential price hike of 49% during this period. Anuj Puri, Chairman of ANAROCK Group, attributed this steep rise to increased construction costs and robust sales.
Pandemic boosts residential market
Puri stated that the COVID-19 pandemic was a "boon" for the residential markets in NCR and MMR, causing demand to skyrocket. This surge in sales led to a decline in unsold inventory, particularly in NCR, which saw its unsold stock decrease by over 52% from around 1.82 lakh units at H1 2019-end to around 86,900 units by H1 2024-end. Consequently, the inventory overhang reduced from 44 months to just 16 months during this period.
Supply curtailment and new launches impact housing market
The conscious reduction of fresh supply was a significant factor in clearing stock. ANAROCK data shows that around 1.72 lakh units were launched in NCR between H1 2019 and H1 2024. In contrast, MMR saw over 5.26 lakh units launched during the same period, leading to a 13% decline in its unsold stock due to substantial new launches meeting resurgent demand. Consequently, the inventory overhang in MMR reduced from 34 months to just 14 months by H1 2024-end.
NCR and MMR witness significant price appreciation
Puri revealed that the NCR noted a 49% five-yearly climb in average residential prices between H1 2019 and H1 2024 — up from ₹4,565 per square feet to ₹6,800 per square feet. In MMR, average residential prices clocked 48% increase during the same period - from ₹10,610 per square feet in H1 2019, to ₹15,650 per square feet in H1 2024. This significant price appreciation is attributed to steep hikes in construction costs coupled with healthy sales.
