NCR has about six years of unsold residential inventory

NEW DELHI: Builders in the National Capital Region (NCR) are finding it difficult to sell-off their properties. The “age of unsold inventory”, the number of quarters for which the unsold inventory of a market or micro-market has existed there, is 23.5 quarters in NCR, according to a recent report by Knight Frank India.

It is distantly followed by Chennai with age of unsold inventory here being 15.5 quarters and Bengaluru with 15 quarters.

At current situation it will take over one year to exhaust the unsold inventory in NCR. The quarters-to-sell (QTS) inched up from 11.7 quarters in 2019 to 13.8 quarters in 2020. This was mainly because of a dip in sales velocity during the pandemic. A lower QTS indicates a healthier market.

Home sales dipped 50% in overall 2020 to about 21,234 units while in H2 2020 they fell by 31% to 15,788 units. In 2020, Greater Noida accounted for 39% of the total residential sales followed by Gurugram at 29%. Ghaziabad comprised 16% of the residential sales whilst Noida accounted for 14% of the same. The remaining 2% came from Delhi and Faridabad.

In 2020, the weighted average residential prices in NCR corrected by 4% over 2019. In H2 2020, nearly 58% of total sales belonged to the category of ticket sizes greater than Rs 50 lakh. There hasn’t been much divergence in this trend when compared to the H1 2020 or H2
2019 period.

Only 9,824 residential units were launched across NCR in 2020, the lowest in the past 11 years. Due to the lockdown in H1 2020, developers refrained from introducing new residential supply in the market, which caused the annual launches to decline by 57% year-on-year.

“New launches are not being preferred as the region is already reeling under substantial unsold inventory and developers prefer to offload existing stock. Though the buyer has started taking decisions, he is still very risk averse at present. A perceptional trust deficit is playing on the buyer psyche, and therefore, developers having a better track record are being considered currently,” said Mudassir Zaidi, executive director (North), Knight Frank India.

Gurugram continued to account for the lion’s share of new launches in 2020. It comprised 47% of the total, followed by Greater Noida at 20%, Ghaziabad at 19%, Noida at 11% and Faridabad at 3%.