Developers plan record 253 mn sq ft housing supply amid robust demand

An analysis by real estate consultant Anarock shows that the top 11 listed India-based developers plan to launch 253.16 million square feet of new supply across multiple cities in the next few years. This launch marks a significant expansion in the country’s housing development pipeline.

 

Notably, only 23 per cent of the planned supply (about 57.15 million square feet) was launched in the first half of FY2025, highlighting a robust pipeline of new supply set to roll out in the coming quarters.

 

“Various factors indicate that 2025 will see significant new supply added across cities, particularly by these listed developers. Amid high demand for their branded offerings, they have been aggressively tapping the capital markets via Qualified Institutional Placements (QIPs) for their expansion. Several of these players raised as much as Rs 12,801 crore via QIPs in 9M (first nine months) 2024. Much of these funds are earmarked for land acquisition and to launch residential projects. These players are more than adequately funded,” said Prashant Thakur, regional director and head – research, Anarock Group.

 

Among the top listed players, Bengaluru-based Prestige Group, with 75 million square feet, has the highest new supply planned over the next few years. Of this, they launched just 10.05 million square feet (13 per cent) in H1 FY2025 across geographies. In early September, the Group indicated an overall project pipeline of at least 60 million square feet.

 

Following this, Signature Global has the second-highest launch plan with approx. 29.3 million square feet over the next few years. In H1 FY2025, they launched approx. 9.5 million square feet (32 per cent) of their scheduled supply.

 

Inventory overhang

  Anarock data shows that the inventory overhang (residential projects that have been completed yet remain unsold over a span of time) across the top 7 cities reduced to 14 months by the end of 9M 2024, down from 17 months in the same period of 2023. This represents the lowest inventory overhang in the last decade, fuelling developer sentiment to increase supply in the market.

 

“City-wise, Hyderabad has the highest inventory overhang of 19 months among the top 7 cities, while Bengaluru has the lowest at just 8 months. In the last two years, Bengaluru saw its unsold stock drop by 6 months while Hyderabad saw a dip of just two months. Hyderabad also saw considerable new supply infusions in the last two years,” Thakur added further.

 

The new housing supply in 2024 was relatively subdued compared to the peak year of 2023, primarily due to approval delays in the first half of the year linked to elections, as well as state elections in the second half.