REAL ESTATE: Waiting Period For Uunsold Inventory in Chennai is Lowest ..!

Builders across India are a worried lot as unsold housing stock has been piling up in the recent months.

Chennai's unsold housing stock, for instance, has risen from 20,000 units a year ago to 45,000 units now as per a study conducted by international realty consultant Jones Lang LaSalle (JLL) India.

Sales have dipped across 7 major markets in India in the first quarter of 2013, said JLL India Chairman and Country head  Mr. Anuj Puri.

As against 80,000 apartments sold in the last quarter of 2012, only 65,000 units were sold between January and March this year (2013). A sizeable portion, about 39 % of these sales happened in the National Capital Region (NCR).


City Name  Apartments Sold of  %
NCR                  30%
Mumbai             18 %
Bangalore          15 %
Chennai             13 %
Pune                   8 %.


Unsold inventory..!

City Name  Unsold Inventory Period

All India          15 Months
Chennai          10 months.
Hyderabad      12 months
Kolkata           12 months
Pune               14 months
Gurgaon         14 months
 Bangalore      23 months


Mumbai accounted for 18 %,Bangalore 15 %,Chennai 13 % and Pune 8 %.

The waiting period for unsold inventory in Chennai city  is the lowest among 7 major Indian cities, said Mr. Puri.

While the average waiting period for a completed apartment to get sold in India is 15 months, in Chennai it is only 10 months. Hyderabad & Kolkata have a slightly higher waiting period of 12 months, Pune & Gurgaon 14 months &  Bangalore 23 months.

An average apartment in Mumbai, which has the highest waiting period, gets sold after 34 months of completion.  It is this comparatively higher demand for residential apartments that helped Chennai rebound soon after the 2008-09 realty slump, noted Mr. Puri.

Differentiating between Chennai city and outlying areas, JLL India MD Badal Yagnik said, While the demand for housing in the core city is quite high even now, it has slowed down in the suburbs. He attributes the slump in the suburbs partly to an unprecedented glut in supplies and partly to a steep hike in prices, especially on the Old Mahabalipuram Road in a short span of 6 to 9 months. Until a year ago, apartment price on the OMR was in the region of Rs. 4,000 per square feet. It suddenly went up to Rs. 5,500 per square feet in areas such as Sholinganallur &  Thoraipakkam, which still lag in good social infrastructure.

About 35 % of Chennai suburbs unsold housing stock is on the OMR, said India Property CEO Mr. Ganesh Vasudevan. If investors who have funded the projects find it difficult to exit, the market may crash as it happened in the case of NCR, he said. Too much concentration by builders on OMR is the bane of Chennai, noted Arun Excello CMD Mr. P Suresh.

When so much of the development is happening on the OMR, transportation facility and social infrastructure need to be improved manifold.


SRC: TOI
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