A steady increase in unsold inventory with real estate developers

Mumbai, Ta. September 19, 2019, Thursday

The top real estate developers in the country have been steadily increasing their unsold inventory, which has worsened the real estate sector's finances. At the end of the fiscal year 5, real estate developers in the country had unpaid stocks worth Rs 1.8 trillion, which was 5% more than the financial year of the year 1, as can be seen from the annual audited results released by these developers.

In the last financial year, the combined revenue of the industry has decreased by 8.5% while net profit has increased by 8.5%. The inventory value at the end of March 1 is equal to the industry's six-month revenue, said one analyst.

As a result of the results of the five companies in the real estate sector, the debt was increased by 5% on an annual basis to Rs 1 crore. If the unlisted stocks of unlisted companies in the real estate sector are covered, the level of inventory can be very high. Analyst estimates that there are 1.7 million dwellings in the country without a sale, with the total value being estimated to be around Rs 1.8 trillion.

This unsold stock is becoming a concern for unlisted, small and medium real estate developers. Due to the poor real estate sector in the country, the share of companies in the sector has also gone down recently.

The government has recently announced incentives to push the real estate sector out of recession, but industry leaders say the incentives are inadequate.