India’s Residential Real Estate Market Signals Strong Demand As Inventory Overhang Hits Historic Low: Proptiger Report

New Delhi / September 30, 2024: The Indian residential real estate market has hit a historic milestone, with inventory overhang (the estimated time required to sell off unsold stock based on sales velocity) dropping to 22 months in the June quarter, down from 34 months in the corresponding quarter last year. This decline underscores robust demand across the sector. Notably, the inventory overhang varies significantly across regions, with Delhi-NCR recording the highest at 31 months and Kolkata the lowest at 16 months, a new study revealed.  

In its quarterly report titled ‘Real Insight Residential – April-June 2024’, the Gurugram-headquartered Proptiger.com highlighted significant improvements in key regions, with NCR’s Gurugram witnessing a substantial decline in inventory overhang from 72 months in Q2 2023 to 31 months in Q2 2024. Ahmedabad also showed strong performance, reducing its inventory overhang from 33 months to 18 months during the same period, reflecting the healthy demand dynamics in these markets, Proptiger.com said in a statement. 

Regarding unsold inventory, the report noted that despite a moderation in supply and absorption rates, India’s residential real estate market displayed resilience, achieving a 2% year-on-year decline, bringing the total to over 9.26 lakh units as of June 30. This reduction underscores the market’s capacity to adapt to evolving conditions, maintaining overall stability and indicating sustained buyer interest across various regions, the report claimed. 

Vikas Wadhawan, Group CFO – REA India & Business Head, PropTiger.com, said, “The significant reduction in inventory overhang to 22 months from 34 months year-on-year reflects strong and sustained demand in India’s residential real estate market. Cities like Gurugram and Ahmedabad have shown remarkable progress, with NCR – Gurugram overhang dropping from 72 months in Q2 2023 to 31 months in Q2 2024, and Ahmedabad’s from 33 months to 18 months over the same period. This trend, combined with a 2% annual decline in unsold inventory to around 9.26 lakh units, underscores the market’s resilience and effective adjustment to evolving conditions. As we approach the festive season, we anticipate this positive momentum will continue to gain strength, further boosting market activity and buyer engagement across the country.”