While overall housing sales across 75 cities dipped marginally by around 1% year-on-year, the total value of transactions surged nearly 16%, reflecting a continued shift toward premium housing and higher-value deals.

Record Supply Becomes Defining Trend

The most striking development in FY26 was on the supply side:

• 1.72 lakh units launched in a single quarter — highest ever
• ~10% annual growth in new launches
• Top 8 cities contributed 1.22 lakh units
• Tier II & III cities added nearly 50,000 units

This surge signals a broad-based expansion of India’s housing market, moving beyond the post-pandemic consolidation phase dominated by large developers.

However, this rapid supply growth has pushed unsold inventory to nearly 12 lakh units, with inventory overhang at:

• ~20 months in Tier I cities
• ~19 months in Tier II & III cities

These levels remain within manageable limits—but the trajectory warrants caution.

Mixed Demand Across Cities

City-level performance remained uneven:

• NCR led growth with ~11% increase in sales
• Ahmedabad & Bengaluru showed steady momentum
• MMR (Mumbai Metropolitan Region) contributed ~24% of total sales with moderate 4% growth
• Pune saw the sharpest decline at ~25%
• Tier II & III cities collectively declined ~4%

Despite volume moderation, price growth and premium demand kept overall market value strong.

Prices Continue to Rise Moderately

Housing prices across India maintained an upward trajectory:

• ~3% pan-India price growth YoY
• Ghaziabad saw up to 9% appreciation
• Bengaluru recorded around 7% growth

Notably:

• 61% of projects saw price increases between 0–10%
• 17% projects recorded over 10% appreciation

This indicates a more stable and sustainable price growth cycle, rather than speculative spikes.

Market Broadens Beyond Large Developers

One of the most important structural shifts is the return of smaller and regional developers:

• Total active developers increased to 17,679
• Smaller developers contributed 29% of total launches (~1.81 lakh units)
• 59 large developers accounted for only 18% of launches (~1.1 lakh units)

This suggests the market is transitioning from consolidation to decentralization, with broader participation across the ecosystem.

Mid-Segment Housing Makes a Comeback

Contrary to the perception of a purely luxury-driven market, the mid-income segment is witnessing a revival:

• ₹1–1.5 crore segment led launches with 83,430 units
• ₹50–75 lakh segment emerged as a key contributor
• Nearly 34,000 affordable units (<₹30 lakh) were also launched

The ₹50 lakh to ₹5 crore price band now dominates supply, indicating diversified demand across income groups.

Execution Risks Begin to Emerge

Despite strong supply momentum, a key concern is construction lagging behind launches:

• Slower project execution across regions
• Rising unsold inventory in certain pockets
• Aggressive new launches without matching completion pace

These trends point to emerging execution risks, which could impact delivery timelines and buyer confidence if not managed carefully.

Outlook: Transition Phase for Indian Housing

The report suggests that India’s housing market is entering a critical transition phase:

• Moving from consolidation to broad-based growth
• Rising participation from smaller developers
• Demand expanding beyond premium to mid-income segments

However, the sustainability of this growth will depend on:

• Timely project execution
• Inventory management
• Balanced supply-demand dynamics

If managed well, this phase could lead to a more resilient, inclusive, and structurally stronger housing market.

Also Read: India’s Housing Market Shines Globally: 9.6% Price Growth in 2025 Outpaces World Average

The post India’s Housing Market Expands, But Execution Risks Begin to Surface appeared first on Square Feat India.

This case sends a clear signal: RERA’s protections for delayed possession are strong, even in old pre-RERA agreements, and past refund proposals don’t wipe out your rights if you hold on for the flat.

Buyer’s Ordeal: ₹20 Lakh Paid in 2010–Still No Flat in 2026

Vilas Janardan Gode booked a 410 sq ft carpet area flat in “Veena Velocity Phase II” (MahaRERA Reg. P99000014147), Vasai, in October 2010 for ₹19.68 lakh.

• He paid almost the full amount: ~₹19.60 lakh directly (₹14.97 lakh via IDBI Bank home loan) (total ~99.5% towards consideration).
• Extras included stamp duty, service tax/GST, and over ₹8 lakh in loan interest by 2019.
• Agreement registered November/December 2010—but no possession date was specified.
• Builder verbally promised ~1-year delivery, but reality was very different.

Construction halted for years due to a 2011 court injunction in a land dispute (settled only in 2017). Work resumed, completed by November 2018, but no OC from CIDCO/Vasai—blamed on landowner insolvency/legal hurdles. OC finally issued February 13, 2025.

The buyer filed his complaint in September 2020, demanding possession, interest for delay (from 2013 or project proposed date 2017), and ₹5 lakh compensation.

Builder’s Main Defences: Court Stay, Refund Offers, and “No Date Promised”

The developer (M/s. Nikunj Developers) argued:

• No fixed possession date in the 2010 agreement (under old MOFA law), so no breach.
• Delay caused by unavoidable court stay (2011–2017) + later OC technical issues.
• Multiple refund offers with interest (9–12% p.a.) in 2013, 2014, and 2015—buyer refused, so he “waived” claims.
• RERA doesn’t fully apply to pre-2016 sales; project extensions (to 2020) cover them.
• Most other buyers took “fit-out” (semi-finished) possession; only this buyer insisted on full OC.

MahaRERA’s Firm Ruling: Delay Interest Is Your Unqualified Right

Member Ravindra Deshpande rejected key defences:

• RERA applies retroactively to ongoing/incomplete projects (per Supreme Court in Newtech Homes).
• No date in agreement? Reasonable possession time is 3 years from agreement date (Supreme Court in Fortune Infrastructure)—so due by November 2013.
• Court stay/OC delays don’t excuse indefinite wait after buyer paid nearly full amount.
• Section 18 gives unqualified right to interest if buyer stays in project (not withdrawing for refund).
• Rejecting old refund offers ≠ waiver; buyer chose the flat, so interest applies.
• Interest is compensatory—no extra ₹5 lakh needed.

Final Directions (3 Feb 2026):

• Hand over full possession with OC within 30 days.
• Pay interest on ₹19,59,758 (consideration paid, excluding stamp duty/taxes/GST) at SBI highest MCLR + 2% p.a. (currently 8.80% + 2% = 10.80% p.a. as of Feb 2026).
• From 27 November 2013 till actual possession (potential payout: several lakhs—exact calc pending).
• ₹10,000 case costs to buyer.

Key Takeaways for Every Homebuyer in Maharashtra

• RERA trumps old agreements and project extensions for individual delay claims.
• 3-year rule often sets the clock for interest if no date specified.
• Builders’ “we offered refund earlier” defence fails if you stick with the project.
• Interest accrues monthly on what you paid toward the flat price—powerful compensation.
• If delayed beyond reasonable time, check your project’s RERA portal and file under Section 18 early.

This ruling reinforces that homebuyers aren’t powerless against years-long waits. If you’re in a similar boat, your rights are real—and enforceable.

Also Read: Landmark MahaRERA Tribunal Ruling: Homebuyers Can Claim Interest on Delay Even After Taking Possession

The post 12-Year Nightmare Ends: MahaRERA Says Refund Offers Don’t Erase Delay Liability! appeared first on Square Feat India.

The data signals a decisive shift in buyer preferences toward spacious homes, premium layouts, and lifestyle-driven housing—trends that have accelerated since the pandemic reshaped expectations around living environments.

Luxury Housing Drives the Upsizing Trend

“Large 3–4 BHKs and homes with study rooms are now mainstream,” said Anuj Puri, Chairman of ANAROCK. He noted that buyers seeking such homes remain largely unfazed by rising property prices, indicating that demand for premium housing remains robust rather than slowing.

The surge in average sizes is closely tied to the luxury segment’s rapid expansion. In Delhi NCR, for example, luxury housing (priced above ₹1.5 crore) accounted for 80% of new launches in 2025, up sharply from 40% in 2023. This led to the region recording the highest growth in average flat sizes—30% in two years, climbing from 1,890 sq. ft. to 2,466 sq. ft.

City-Wise Leaders and Laggards

Among major markets:

• Hyderabad recorded the largest average home size in 2025 at about 2,600 sq. ft., up 13% in two years.
• Bengaluru saw a strong 21% jump to roughly 1,790 sq. ft.
• Chennai posted a 24% rise to about 1,561 sq. ft.
• Mumbai Metropolitan Region had the smallest homes despite a 12% increase—from 810 sq. ft. to 904 sq. ft.
• Pune and Kolkata saw only modest growth of 5% and 2% respectively.

Across India, average sizes rose 8% in the past year alone, though Pune was the only city to record a slight decline during that period.

Post-Pandemic Shift Reshaping Buyer Psychology

The long-term trend is even more dramatic. Compared to 2019, average home sizes across the top cities have expanded 45%, rising from about 1,140 sq. ft. to roughly 1,656 sq. ft. NCR alone has seen nearly double-sized homes over six years, while Hyderabad recorded a 53% increase.

Industry analysts say the pandemic permanently altered buyer priorities. Homes are no longer viewed purely as shelter or investment assets; they are increasingly seen as lifestyle statements and symbols of upward mobility. Buyers now expect additional rooms for work, study, fitness, or leisure—features once considered luxury but now entering the mainstream.

What’s Fueling the Shift

Several factors are pushing developers toward larger units:

• Rising incomes among affluent buyers
• Growing demand for luxury and premium housing
• Hybrid work culture requiring extra space
• Desire for upgraded amenities and layouts
• Developers focusing on higher-margin inventory

These trends suggest that even as prices rise, developers are likely to continue launching bigger homes to match evolving demand.

Also Read: Average Flat Sizes in Top 7 Cities Rise by 11% in 2023

The post Bigger Homes, Bigger Aspirations: Average Flat Sizes Jump 17% Across India’s Top Cities appeared first on Square Feat India.

The deceleration reflects a phase of price normalisation after two years of strong appreciation, even as demand remained resilient in select end-user-driven markets such as Bengaluru and Hyderabad.

Bengaluru, Hyderabad Buck the Trend

Among the eight major cities, Bengaluru and Hyderabad stood out with relatively stronger price momentum in 2025.

• Bengaluru recorded 13% annual price growth, up from 12% in 2024, driven by sustained end-user demand and strong absorption. During the year, prices rose 21% between Q1 and Q4 2025, pushing average values to ₹9,500 per sq. ft. in Q4, making it India’s second-most expensive housing market, overtaking Delhi-NCR.
• Hyderabad saw prices rise 8% in 2025, compared to 3% growth in 2024, supported by steady demand and balanced supply additions.

Price Growth Cools Across Other Major Markets

In contrast, price appreciation slowed considerably across the remaining six cities:

• Ahmedabad: 8% growth (down from 10% in 2024)
• Mumbai MMR: 4% growth (sharp moderation from 18% in 2024)
• Pune: 1% growth (down from 16% in 2024)
• Delhi-NCR: 6% growth (after an exceptional 49% rise in 2024)
• Kolkata: 6% growth (down from 10%)
• Chennai: Prices remained flat after a 16% rise in 2024

At an aggregate level, average housing prices across the top eight cities increased from ₹7,451 per sq. ft. in 2024 to ₹7,874 per sq. ft. in 2025.

Market Shows Consolidation, Not Weakness

According to the report, housing prices continued to firm through 2025, rising an average 8% between Q1 and Q4, indicating stability rather than overheating.

Commenting on the trend, Onkar Shetye, Executive Director at Aurum PropTech, said Mumbai MMR reflected price consolidation in its premium segments, while Pune and Ahmedabad remained broadly stable. Delhi-NCR and Kolkata saw measured growth amid selective demand, while Bengaluru and Hyderabad benefited from strong end-user-driven absorption.

He added that resilient pricing despite moderating sales volumes reflects a disciplined, supply-calibrated market, with developers protecting price integrity and managing inventory prudently heading into 2026.

Inventory Levels Remain Comfortable

The report noted that inventory overhang stayed within comfortable limits, indicating that supply did not materially outpace demand. Unsold inventory growth was more visible in higher ticket-size segments, where decision cycles are longer and liquidity is lower.

According to Shetye, the combination of stable quarterly price increments, controlled supply additions, and calibrated launches helped keep inventory levels well managed through the year.

Sales and Supply Decline in 2025

Despite price stability, housing transactions slowed during the year:

• Residential sales fell 12% YoY to 3,86,365 units in 2025, the lowest annual sales since 2022
• Q4 2025 sales declined 10% YoY to 95,049 units, the weakest quarterly performance since Q2 2023

On the supply side:

• New launches dropped 6% YoY to 3,61,096 units in 2025, the lowest since 2021
• Q4 2025 supply rose marginally by 4% YoY to 92,007 units

This combination of softer sales and moderated supply underscores a market transitioning from rapid growth to sustainable equilibrium.

Outlook for 2026

The PropTiger–Aurum PropTech report suggests that India’s housing market is entering 2026 on a stable footing, supported by disciplined developers, controlled inventory, and end-user demand in key markets. While price acceleration has cooled, the absence of distress signals points to a structurally healthier residential market.

Also Read: Property Prices Surge Significantly Along Yamuna Expressway

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While global house prices grew modestly by 2.4% annually in Q3 2025 — aided by decisive monetary easing from central banks — India’s performance underscores deep-rooted end-user demand, improving affordability, and a stable macroeconomic backdrop.

Turkey topped the global charts with a staggering 32.2% nominal price surge, followed by North Macedonia (25.1%) and Portugal (17.7%). However, in real (inflation-adjusted) terms, many high-growth markets saw gains eroded — with Turkey posting negative real growth (-0.8%).

India’s Top 10 Global Ranking – Q3 2025

Source: Knight Frank Research

Strong Sales Momentum & City-Level Price Surge

Residential sales across India’s top eight cities remained steady in 2025 at over 348,000 units, with H2 2025 volumes hitting the highest level since 2013. The quarters-to-sell ratio stayed balanced at 5.8 quarters, even as unsold inventory rose — largely due to higher-value project launches.

Price appreciation was widespread and led by:

• National Capital Region (NCR): +19% YoY
• Hyderabad : +13% YoY
• Bengaluru : +12% YoY
• Mumbai : +7% YoY

A structural shift is clearly visible: homes priced above INR 1 crore now account for around 50% of total sales — reflecting buyers’ preference for larger, better-quality homes in well-connected locations.

Developers have responded prudently — moderating new launches, focusing on execution, and offering targeted financing incentives rather than broad price corrections — helping sustain absorption.

Global Context & Outlook

Globally, easing monetary policies in Q3 2025 began supporting demand, but real price growth remains constrained in many markets due to lingering inflation. Emerging and select European markets led nominal gains, while several mature markets (Northern Europe, parts of East Asia) continued to see declines.

Liam Bailey, Knight Frank’s Global Head of Research, noted: “Nominal growth has edged higher again as central banks pivot towards cuts, but real gains are still hard-won. To see firmer growth into 2026, policymakers will need to maintain easing while inflation continues to retreat.”

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, commented: “India’s housing market continues to stand apart in a global environment that remains uneven. The combination of strong economic growth, easing financial conditions and a decisive shift towards end-user-led demand has created a more mature and resilient residential cycle. As we move into 2026, we expect the market to be defined by stable absorption, selective price appreciation and disciplined supply, rather than speculative excess.”

With India’s economic fundamentals robust and monetary conditions turning supportive, the residential sector remains well-positioned to sustain its global outperformance in the year ahead.

Also Read: Good news: Home prices to correct by 15%

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Luxury Drives the Boom, But Affordable Housing Falters

The report reveals that India’s housing value growth is being fuelled almost entirely by the luxury segment.
Apartments priced above ₹2 crore recorded a 24% jump in sales, while ultra-luxury homes above ₹10 crore grew 40% YoY.
However, this top-heavy growth hides a worrying reality — sales volumes across the country remained flat (0% YoY), indicating that fewer people are buying homes even as prices rise.

“The surge in high-value transactions propelled the total sales value to ₹8.27 lakh crore, masking flat unit sales volume,” said Pankaj Kapoor, Managing Director, Liases Foras.
“Meanwhile, affordable and mid-segment homes saw declines of up to 13% and 7%, showing that the market’s growth is now heavily concentrated at the top.”

Construction Slowdown: The Silent Crisis

Perhaps the most alarming finding is that the actual pace of construction has slowed sharply, widening the gap between promises and deliveries.
According to Liases Foras, the ratio of constructed supply to total marketable supply has fallen from 75% in 2017 to just 57% in 2025.

“This gap signals slower revenue recognition for builders, higher execution risks, and potential project delays,” said a spokesperson for Liases Foras.
“Builders are committing more projects than they can deliver, meaning the current boom in sales isn’t being matched by actual housing stock on the ground.”

This slowdown could lead to project bottlenecks, delayed handovers, and liquidity pressure if not addressed swiftly — especially for homebuyers awaiting possession in under-construction projects.

Mumbai Tops Sales, NCR Faces the Highest Risk

The report highlights strong regional contrasts:

• Mumbai Metropolitan Region (MMR) leads with 26% of India’s total housing sales value and 8% growth in unit sales YoY.
• National Capital Region (NCR) ranks second in value but faces the highest internal stress — with 45% of its unsold inventory classified as stalled projects.
• Tier-2 cities saw a 12% fall in sales volume, though new supply levels remained stable.

Market Has Likely Peaked

After a record FY2024–25, Liases Foras now believes the market has hit its peak. Sales volumes have already declined 3% in Q1 and 1% in Q2 of FY26, pointing to possible stagnation ahead.

“India’s housing cycle appears to be nearing saturation,” the report concludes, adding that luxury demand alone cannot sustain long-term growth without broader affordability and faster construction.

Also Read: Buying a House? Beware! These Real Estate Projects Are Up for De-registration

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Mumbai, October 07, 2025 — India’s residential real estate market maintained steady growth in the third quarter of 2025, driven by strong demand for premium homes. According to Knight Frank India’s quarterly update, 87,603 housing units were sold across the top eight cities in Q3 2025 — a 1% year-on-year (YoY) increase, defying expectations of a slowdown.

Supply remained stable, with 88,655 new units launched, a marginal 2% YoY decline. Price growth persisted across all markets, underpinned by easing inflation, improved liquidity, and supportive macroeconomic conditions.

Inflation cooled to 2.07% in August 2025, down from 3.65% a year ago. The RBI’s FY 2026 GDP forecast was raised to 6.8%, and the repo rate stood 100 bps lower than end-2024 — factors that bolstered end-user confidence and homebuying sentiment.

City-wise Residential Sales Performance — Q3 2025

Mumbai led with 24,706 units sold, contributing 28% of total sales. Chennai stood out with 12% YoY growth, its highest post-pandemic performance. NCR and Bengaluru maintained steady volumes, while Pune was the only laggard with an 8% decline.

Premium Housing Emerges as Growth Driver

Premium housing continued its upward trajectory, marking a structural shift in buyer demand. Units priced below ₹1 crore saw their share of sales decline to 48% in Q3 2025 from 54% a year earlier. In contrast, sales of homes priced over ₹1 crore rose to 52%, growing 15% YoY.

The ₹1–2 crore segment accounted for 28% of total sales, making it the largest by volume. Ultra-luxury categories like ₹10–20 crore recorded a 170% surge YoY, albeit on a lower base.

Ticket-Size Segment Sales — Q3 2025

Gulam Zia, Senior Executive Director – Valuation, Advisory and Research, Knight Frank India, observed that premium housing has “decisively taken centre stage,” reflecting changing urban aspirations for larger, better-quality homes.

New Launches See Mixed Trends

New residential launches across the top eight markets dipped slightly by 2% YoY to 88,655 units. Growth was led by Chennai (+44%) and Bengaluru (+28%), while Mumbai and NCR saw sharp declines of 19% each, weighing on overall supply.

Price Growth Remains Broad-Based

Average residential prices rose across all markets in Q3 2025, led by NCR (+19%), followed by Bengaluru (+15%) and Hyderabad (+13%). Even with moderate sales growth, robust price appreciation points to sustained demand and limited immediate supply pressures.

Inventory Health Stays Stable

The Quarters to Sell (QTS) — a key indicator of market health — remained stable at 5.8 quarters, equivalent to less than 18 months of inventory. Unsold inventory rose 4% YoY to 506,400 units, but stable sales velocity over the past eight quarters indicates healthy absorption.

Notably, unsold inventory in higher ticket-size segments (above ₹2 crore) has risen faster than in the affordable categories, particularly in the ₹20–50 crore range where QTS stretched to 14.4 quarters, indicating slower absorption in ultra-luxury homes.

Market Outlook: Plateau Phase Likely Ahead

Shishir Baijal, Chairman & Managing Director, Knight Frank India, noted that India’s housing market is now in its fifth year of an upcycle, and the YoY growth rates are beginning to rationalise. He indicated the market may be entering a prolonged plateau phase, supported by stable macroeconomic conditions and evolving buyer preferences.

Financing innovations, subvention schemes, and fiscal incentives continue to channel demand toward higher-value segments, ensuring resilience even amid geopolitical uncertainties.

Also Read: Home Sales Up By 12% In India.

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Global Context – India Punches Above Its Weight

While many global housing markets struggled to sustain momentum in the face of high inflation and elevated interest rates, India’s property sector continued its steady climb. Major economies such as the United States (3.4%), United Kingdom (3.9%), and Australia (4.5%) posted slower growth, highlighting India’s relative resilience.

Top Global Performers vs. India

Why India is Growing Faster

1. Infrastructure Expansion – Metro projects, expressways, and airport upgrades in major cities.
2. Economic Growth – Strong GDP performance and urban job creation, particularly in IT and services.
3. Resilient Demand – Post-pandemic preference for homeownership remains intact.
4. Interest Rate Stability – The Reserve Bank of India’s relatively moderate rate cycle has kept affordability less strained compared to other markets.

Global Laggards

Several major economies saw prices drop sharply:

• Mainland China: -7.5%
• Hong Kong SAR: -6.5%
• Finland: -6.0%
  These declines contrast sharply with India’s upward trajectory, underscoring its position as a bright spot in the Asian property landscape.

Expert View

Liam Bailey, Global Head of Research at Knight Frank, said:

“India’s performance reflects strong domestic demand supported by infrastructure investment and a growing middle class. It is well placed to outperform the global average again in 2025–26.”

Outlook

Knight Frank expects 6–8% nominal price growth in India for 2025–26, with metro-linked suburbs and planned urban townships likely to see above-average gains. However, affordability pressures in mid-income housing could temper momentum if interest rates rise again.

Also Read: Property Prices Surge Significantly Along Yamuna Expressway

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India’s residential market is witnessing a clear shift in consumer preferences toward premium housing, with homes priced above ₹1 crore now forming 62% of all housing sales in H1 2025, according to JLL’s latest Residential Market Update.

Despite a 13% year-on-year (Y-o-Y) dip in H1 sales volumes, the second quarter (Q2) of 2025 posted a 7% rise in quarterly sales, reaching 69,530 units, signaling a strong mid-year rebound. The ₹3–5 crore and ₹5 crore+ categories emerged as fastest-growing segments, outpacing demand in the mass market.

India Residential Market Overview – H1 2025

Ticket Size Break-up: H1 2025 vs H1 2024

City-wise Residential Sales – H1 2025

New Launches: H1 2025

Despite slower overall launch momentum, premium housing launches surged, particularly in Chennai, Kolkata, and Bengaluru.

Capital Value Growth – Q2 2025

Expert Insights

“The steady growth in luxury home sales indicates rising buyer affluence and a focus on value-driven transactions. While sales in the ₹1 Cr+ category grew 6%, sub-₹1 Cr homes dropped 32% year-on-year.”
— Dr. Samantak Das, Chief Economist and Head of Research, JLL India

“Despite fewer launches, developers are aligning with premium demand. Launches of ₹1 Cr+ homes more than doubled YoY. Cities like Chennai and Kolkata led this transition.”
— Siva Krishnan, Head – Residential Services, JLL India

Outlook: Value, Affordability & Premiumization

The combination of a likely repo rate cut, easing inflation, and growing urban affluence is expected to support sustained growth in India’s housing market. While price appreciation may moderate, especially in the premium segment, demand for well-located, high-value homes remains resilient, particularly in Mumbai, Bengaluru, Pune, and Delhi NCR.

Also Read: Luxury Housing Unsold Stock Rises 10%.

The post Premium Housing Surges as Mass Segment Slows: 62% of India’s H1 2025 Sales Now Above ₹1 Crore appeared first on Square Feat India.

India’s residential real estate sector is expected to sustain steady growth over this fiscal and the next, as sales and demand stabilize following three years of strong post-pandemic recovery, according to an analysis by CRISIL Ratings.

The report, covering 75 major real estate companies that account for ~35% of national residential sales, projects a compound annual growth rate (CAGR) in sales volumes of 5–7%, with average prices rising 4–6%. This translates to a steady 10–12% growth in value terms.

Demand Revival Supported by Lower Rates and Premium Housing
Last fiscal, demand remained flat, weighed down by higher capital values and delays in launches due to elections and regulatory changes in some states. However, the current and next fiscals are expected to see demand rebound on the back of:

• Improving affordability as interest rates soften
• Sustained appetite for premium and luxury homes
• Normalization of project launches across key micro-markets

“The premium and luxury segments in the top seven cities have seen their share of launches jump from 9% in 2020 to 37% in 2024,” said Gautam Shahi, Director, CRISIL Ratings.
“This trend is expected to continue, with premiumisation driving 38–40% of launches in 2025 and 2026.”

Premiumisation Redefining New Supply
In contrast to the rising prominence of premium housing, the affordable and mid-segments are expected to decline further, largely due to rising land and input costs that have rendered these categories less attractive to developers.

Launch Share by Segment (%):

Supply Still Outpacing Demand
Developers had already ramped up launches over the past three years, leading to supply outpacing demand. As this trend continues, inventory levels are expected to increase slightly:

• From 2.7–2.9 years in the past two fiscals
• To 2.9–3.1 years over the current and next fiscal

Deleveraged Balance Sheets and Strong Collections Underpin Stability
Despite the supply overhang, developers’ credit profiles have strengthened significantly due to:

• Robust collections from strong sales
• Timely project execution
• Adoption of asset-light development models (joint ventures, joint developments)
• Substantial equity inflows, especially through qualified institutional placements (QIPs)

In fact, the QIP proceeds as a percentage of outstanding debt rose from 13–16% in the preceding three fiscals to 24% last fiscal, reflecting growing investor confidence.

Debt Metrics at a Healthy Level

“The continuing improvement in cash flow from operations and rising equity inflows have strengthened credit metrics,” said Pranav Shandil, Associate Director, CRISIL Ratings.
“The debt-to-CFO ratio is projected to improve to 1.1–1.3 times this fiscal and the next, down from 1.2–1.5 times previously and significantly below the ~5.6 times seen in FY20.”

Key Credit Metrics Snapshot:

Outlook: Prudent Leverage, Controlled Inventory Key to Stability
While the outlook remains positive, CRISIL notes that developers’ ability to maintain moderate leverage and control inventory will remain critical for sustaining credit strength.

The report underscores that premiumisation, improved affordability, and healthy cash flows will drive steady growth—albeit at more moderate rates compared to the surge seen in the immediate post-pandemic years.

Also Read: ICRA and CRISIL enhance Commercial Paper limits of Godrej Properties Limited to INR 2000 crore

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