India's Housing Market Faces Surge in Unsold Inventory Amid Declining Sales

A recent report highlights a surge in unsold housing inventory in India, reaching 18 months by Q1CY26 due to continued supply outweighing demand. Despite a decline in sales volume from 4.8 lakh units in CY23 to 4 lakh units in CY25, housing value has grown, signaling a value-volume gap.

The latest Anand Rathi report reveals a rise in unsold housing inventory in India to a staggering 18 months by the first quarter of CY26, with supply surpassing demand. This inventory uptick is measured in 'months of sales' — the duration it would take to deplete current stock at the ongoing sales rate.

The surge stems from continued residential project launches, fueled by accessible funding and lucrative land deals, despite the moderated sales from about 4.8 lakh units in CY23 to roughly 4 lakh units by CY25. The decline, coupled with a 9% annual growth rate reduction, is attributed to a high base effect, affordability challenges, IT sector disruptions, and market-corrected wealth erosion.

While housing sales volume retracts, housing value swells, showing a clear disparity. The report stresses a slowdown across income segments, particularly in affordable to mid-income housing, due to sharp sales drops in key cities. Meanwhile, the premium segment remains somewhat stable, yet experiences growth moderation from CY24 onwards. (ANI)