Real Estate Sector: Inventory clearing period reached 57 months

Mumbai, Ta. 27 November 2020, Friday

As a result of the lockdown imposed by Corona, the period of completion of unsold inventory in the real estate sector, which was 6 months in Corona's previous period, has now been extended to 6 months at the end of September of the current financial year.

The slowdown in sales in the first quarter of the current financial year and the slow recovery in the second quarter led to an increase in inventory, a rating agency said in a report.

Of the country's six major real estate markets, Hyderabad and Bangalore have the lowest inventory levels, followed by Chennai, followed by the Mumbai Metropolitan Region. A total area of ​​2.50 crore square feet was sold during the period. The biggest declines were in Delhi NCR and Bangalore, according to a report by India Ratings.

The performance of the residential sector as an asset class has been poor, which has strained the minds of investors. With the exception of Hyderabad and Bengaluru, the rest of the cities have seen a decline in housing prices.

The report also notes that the current financial year is likely to see a 30 per cent year-on-year decline in housing demand. The economic downturn caused by the Corona has had an impact on demand.

In addition to the uncertainty surrounding the availability of credit in the real estate sector in view of the reduction in risk mitigation by financial institutions, demand risks, refinancing for the sector and liquidity risks could also be raised, the report said.