The inventory overhang in India's residential real estate market has significantly decreased to 22 months in the June quarter of 2024, down from 34 months in the same period last year, according to a report by PropTiger.com. This reduction highlights a positive shift in market dynamics, driven by strong buyer demand and effective absorption of available stock.

Notably, Gurugram in the NCR region experienced a remarkable reduction in inventory overhang, falling from 72 months in the second quarter of 2023 to 31 months in the second quarter of 2024. This drastic decline reflects a resurgence in buyer activity, aligning with broader trends observed across key markets. Similarly, Ahmedabad demonstrated strong performance, with its inventory overhang declining from 33 months to 18 months during the same timeframe, further showcasing robust demand dynamics in these markets.

Despite a moderation in supply and absorption rates, the overall unsold inventory across India’s residential real estate market displayed resilience, achieving a 2% year-on-year decline. As of June 30, over 926,000 unsold units remain in the market. This figure indicates a stabilizing effect on the real estate landscape, as the market adapts to changing consumer preferences and economic conditions.

Mr. Vikas Wadhawan, Group CFO of REA India and Business Head of PropTiger.com, noted, “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.” This sentiment reflects the broader expectations of increased buyer interest during the festive period, traditionally a peak time for property purchases in India.

Ahmedabad led the reduction in unsold inventory, cutting over 12,500 units. In comparison, the NCR region saw a decrease of more than 9,400 units. These reductions indicate healthy demand and a positive market outlook in these key cities, showcasing the effective absorption of available stock.

However, the Mumbai Metropolitan Region (MMR) and Pune, two critical real estate markets in Maharashtra, accounted for 54% of the total unsold inventory across the top 8 cities at the end of the latest June quarter. The MMR and Pune markets experienced comparatively high unsold stock due to an increase in new launches by developers responding to strong consumer demand. In MMR, unsold housing stock rose by 1% to 339,362 units in April-June 2024, up from 335,476 units in the same period the previous year.

This upward trend in new launches indicates that developers are not only optimistic about the market but are also prepared to meet the growing needs of homebuyers. The rise in unsold units in these regions highlights the ongoing adjustments within the market as it reacts to changing dynamics and consumer preferences.

In conclusion, the significant decrease in inventory overhang and the positive developments in key cities like Gurugram and Ahmedabad signal a robust recovery in India's residential real estate market. As the festive season approaches, expectations for increased market activity and buyer engagement remain high, setting the stage for a potentially vibrant period in the real estate sector.

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