Unsold Inventory Is Myth!

unsold inventory is myth

“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” – Franklin D. Roosevelt

Throughout the numerous pages in the books of history, it has been said and proved to a man that property is the biggest and most valuable of all assets one can possess. It is one of the biggest investments one can make in his or her lifetime and also proves to be of immense value and worth if invested after thoughtful research.

As it is rightly said by Anthony Trollope – “It is a comfortable feeling to know that you stand on your own ground. A land is the only thing that can’t fly away.”

The property is the only tangible commodity, which has the highest resilience to depreciation and economic influx. With the advent of time and civilisation, the land began to be commercialised and transacted developing itself into a key industry for any economic system or country. As we all know land is a natural resource gifted to us by mother earth and productive land is limited, its worth is of major economic importance.

Individual Perceptions And Real Estate Industry

It is said that “The best investment on earth is earth” – Louis Glickman. However in the Indian market scenario due to the recent accumulation of Unsold Inventory, people are thinking otherwise. For years, around the globe men have believed in this philosophy; however it is noteworthy that the buying and selling of land largely depend on economic indicators and instruments such as market equilibrium, Gross Domestic Production (GDP) patterns, fluctuations in the level of income, borrowing and lending rates of the Central Bank, etc. The real estate industry also has detrimental and deep-rooted effects on the employment and GDP of a country as it employs a tremendous number of people involved in the construction and development of land.

It is often argued that Unsold Inventory is a Myth, and rightly so. Unsold inventory refers to the amount of under developing & developing properties but not inhabited or sold. It is a major economic drawback and has a large impact on the level of employment. The Indian real estate market has seen a large accumulation of Unsold Inventory in 2015.

Reports testify that there is a total of 7 Lakh unsold homes in 8 major cities of India (Delhi-NCR, Mumbai Metropolitan Region, Bengaluru, Pune, Kolkata, Chennai, Hyderabad and Ahmedabad), which would approximately take 3 years to sell out. Owing to this new launches had gone down by 40% during the first half of 2015, resulting in half a million workers rendered jobless around India’s capital alone.

However, if we closely take a look at this inventories following observations can be drawn –

  • Non-reputed developer’s properties contribution to this stock is HUGE.
  • Reputed developers are always open up staggered inventory, to keep control over projects sale velocity.
  • Aspirations of upcoming small developers have created unreasonably proposed the bigger project, mainly on the outskirts, which are beyond their control.
  • FDI, other Funding institutes generally banks on Reputed / Grade A developer in this type of situation, in fact, they grab a good share via this opportunity.

Pune Realty is certainly robust than that of Mumbai. Since the number of first home buyers, lesser number of investors, pull from Mumbai investors, push from IT, Auto Mobile, Education sector. Upto 5-8% correction is already seen which is getting more transactions to reputed developers in the city.

These contradictory figures raise questions in the minds of investors and economic analysts in reality whether Unsold Inventory is a Myth. To our opinion, we’d say, “Don’t wait to buy Real Estate, buy Real Estate and wait.” ~ Will Rogers