Anuj Puri, Chairman – ANAROCK Property Consultants

Unlike earlier, the resilient markets of south India are beginning to feel the heat of the overall residential slowdown in 2019. As per ANAROCK’s recent research, the southern cities of Bangalore, Hyderabad and Chennai together saw residential sales decline by 5% in the first three quarters of 2019 against the corresponding period in 2018.

The western cities of Pune and MMR raced far ahead and clocked in 33% jump in sales over the same period. Even NCR in the north recorded 15% yearly rise in housing sales between January to September 2019.

The three southern cities collectively saw residential sales of 61,400 units between January and September 2019 as against 64,420 units sold in the first three quarters of 2018. MMR and Pune, on the contrary, saw the sale of nearly 93,930 units in 2019 against 70,740 units in the corresponding period in 2018. Altogether, the top 7 cities recorded sales of 2,02,200 units in 2019 till September, of which western cities comprised 46% overall share while southern region consisted of 30% share.

Concurrently, new launches in the southern cities were also restricted this year and witnessed a mere 3% yearly growth – from 48,410 units in first 3 quarters of 2018 to 50,070 units this year. The western markets of MMR and Pune, on the other hand, saw a significant 65% growth in new supply in a year – from 61,040 units in 2018 to over 1,00,470 units in 2019 (more than double the new supply in the main southern cities). In NCR, new launches rose by 59% in a year from 17,230 units in 2018 to 27,390 units this year.

Amidst declining residential sales and restricted new supply, the southern cities shed unsold stock by 11% during the same period, while their western counterparts largely maintained status quo. As on Q3 2019, the southern cities have a combined unsold stock of nearly 1.19 lakh units, which was over 1.34 lakh units in 2018. MMR and Pune, meanwhile, currently have nearly 3.13 lakh unsold units – almost the same as last year. This was largely due to the ample new supply added in the market during this year.

City-wise Demand-Supply Scenario

Individually, housing sales in Bangalore saw maximum drop of 8% this year, followed by Hyderabad which clocked in 4% fall. Chennai, on the other hand, saw residential sales rise by 12% during the January to September period in 2019. Bangalore saw housing sales of 39,250 units, Hyderabad recorded sale of 13,110 units while Chennai clocked in sale of 9,040 units in 2019.

In the western region, housing supply in MMR recorded a 35% jump in first three quarters of 2019 versus the same period last year. Nearly 62,550 units were sold this year. Pune witnessed 28% rise in sales – from 24,520 units in 2018 to nearly 31,380 units in 2019.

In terms of new supply, both Chennai and Hyderabad recorded yearly drop of 19% and 17% respectively with former seeing new supply of nearly 9,580 units and the latter approx. 11,050 new units in 2019. Contrary to this, Bangalore saw its new supply rise by 27% in the three quarters of 2019 and stood at 29,440 units.

In west India, Pune saw a whopping 106% jump in new residential launches this year – from 17,700 units in Q1, Q2 and Q3 of 2018 to 36,540 units in the corresponding period in 2019. Meanwhile, MMR saw its launches jump up to 63,930 units in 2019 from 43,340 units the previous year, increasing by 48% on y-o-y basis.

Unsold Inventory Across Cities

Interestingly, despite the dull performance of the southern markets in terms of overall residential sales and new launches this year, the 11% yearly decline in unsold stock in the south region gave developers a reprieve. Also, the pile-up of unsold residential stock is far lower in the south than the western region – just 1.19 lakh units in the south against a whopping 3.13 lakh unsold units in the western cities of Pune and MMR.

Among the 3 southern cities, Bangalore witnessed maximum yearly decline of unsold inventory at 17% – the highest among all top 7 cities. The overall unsold stock in the city as on Q3 2019 is 63,540 units. Hyderabad has the least unsold stock among all top 7 cities in the country at about 23,890 units which declined by 12% against Q3 2018. Meanwhile, Chennai saw its unsold stock increase by 4% in a year and currently has approx. 31,380 unsold units.

In stark contrast to the major southern cities, Pune and MMR saw no major difference in their stock of unsold units. In fact, Pune saw its unsold inventory increase by 2% in a year – from 90,610 units in first three quarters of 2018 to nearly 92,560 units in corresponding period of 2019. MMR saw mere 1% reduction during the same period. MMR has the maximum unsold stock among the top cities at approx. 2.21 lakh units as on Q3 2019.