The inventory figures in the real estate market are a key to understanding where the market is heading as a whole. A higher inventory figure means sales are not taking place. And declining sales means there is no demand which is predominantly due to higher prices. Thus, higher inventory levels are a sign that price correction is likely. Now, let us see what the inventory position of key cities in India is. Please note that inventory position is stated in months. So, when it is stated that inventory position in Mumbai is 30 months it effectively means that it will take builders approximately 30 months to sell off the entire inventory in the market. Thus, higher the inventory in months, lower is the sales volume. This signals poor market volumes and illiquidity in markets.

As per news reports, inventory levels in Mumbai stand at 48 months. In Delhi, the figure is 23 months. These figures are at an all time high. This signals that prices are unaffordable. With prices being so high the only way where they can head now is downwards. While it is difficult to tell when the correction will happen, we feel it will be sooner than later.