The crisis is most evident in the affordable housing segment, where homes priced under ₹1 crore — long the backbone of tier-2 demand — saw a steep 15% drop in volumes, reducing their market share from 77% in 2024 to just 72% in 2025. In contrast, high-end homes above ₹1 crore posted a modest 9% growth, pushing their share up to 28%. This shift toward premiumisation is mirroring the slowdown seen in tier-1 cities, where volumes fall while prices keep climbing.

Thirteen of the 15 cities tracked suffered sales declines of up to 38%, with Visakhapatnam hit hardest. Only Mohali (up 34%) and Lucknow (up 6%) bucked the trend. Gujarat’s four major cities — Ahmedabad, Surat, Vadodara, and Gandhinagar — still dominated, accounting for 63% of total sales, with Ahmedabad alone contributing 33% (51,148 units, down 8%). However, even these strongholds felt the pinch, with Surat down 15%, Vadodara 19%, and Gandhinagar nearly flat at -1%.

New supply is drying up too, declining 6% to 1,36,243 units from 1,45,139 in 2024. Launches of sub-₹1 crore homes fell 5%, while those above ₹1 crore dropped 8%. Mohali saw a massive 108% surge in new launches, and Bhopal rose 66%, but 11 cities faced cuts of up to 57%, led by Bhubaneshwar’s steep plunge.

Samir Jasuja, Founder & CEO of PropEquity, warned of deeper structural issues: “The slowdown in housing sales over the past two years is largely due to a shrinking supply of homes priced below ₹1 crore — a segment that has traditionally driven demand in tier-2 cities. Rising land and construction costs, along with changing buyer aspirations, are pushing new launches into higher price brackets. As a result, tier-2 markets are increasingly mirroring tier-1 cities, where volumes are declining even as prices continue to rise.”

He added that government initiatives — including urban development, better connectivity, and industrial corridors — have fueled price appreciation, making even average homes unaffordable in many tier-2 markets. “This could be a cause for concern, as affordability pressures begin to impact not just premium segments but also affordable and mid-income housing in these cities.”

With Ahmedabad poised to graduate to tier-1 status in 2026 due to its massive scale and demand, the broader tier-2 ecosystem faces mounting headwinds. The data paints a troubling picture of a market sliding into stagnation, where fewer homes are sold, fewer are built, and the dream of affordable homeownership slips further away for millions.

The post India’s Tier-2 Real Estate Market in Freefall: Housing Sales Plunge 10%, Launches Tumble 6% appeared first on Square Feat India.

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

The post 📰 Homebuyers Beware: India’s Housing Boom May Have Peaked — Construction Delays Raise Red Flags appeared first on Square Feat India.

Despite low home loan interest rates and a favourable buying environment, both Dhanteras (October 18) and Diwali (October 20) saw muted activity, raising concerns among developers and market watchers.

Festive Property Registration Data: A Sharp Contrast

• October 1–20, 2025: 8,675 property registrations
• Average daily registrations (Oct 1–20): 433
• Dhanteras (Oct 18, Saturday): 284 registrations
  • This is 34.4% lower than the daily average of 433.
• Diwali (Oct 20, Monday): 247 registrations
  • Even lower than Dhanteras — a rare festive dip.

Historically, these two days are among the top-performing periods for property registrations in Mumbai, alongside Dussehra, Akshay Tritiya, and Gudi Padwa. This year, however, both days failed to deliver the expected festive surge.

Why the Numbers Matter

The Mumbai real estate market typically sees a spike in sentiment-led purchases during Dhanteras and Diwali. Buyers often align property registrations with these “shubh muhurats,” making them crucial indicators of short-term demand trends.

The sharp dip in registrations has worried industry insiders, especially since festive seasons often help developers clear inventory and boost quarterly performance.

Prices Holding Firm Despite Slowing Demand

A key reason behind the slowdown is developer pricing strategy.

• Even with sluggish sales, many builders are refusing to reduce prices, holding on to premium rates.
• This price rigidity is now colliding with buyer resistance, leading to delayed decisions and fewer registrations.
• Ironically, home loan interest rates are currently at some of their lowest levels, making this slowdown even more concerning.

If prices were to adjust, experts believe pent-up demand could convert into actual transactions, reviving festive momentum.

Market Watch: A Potential Inflection Point?

The festive period is a litmus test for Mumbai’s real estate sentiment. Two consecutive low-registration days suggest a clear demand hesitation, which — if it continues through the end of October — could signal a broader market cooling.

While developers remain optimistic about year-end launches, the current data points are a wake-up call for the industry to reassess pricing and buyer engagement strategies.

Also Read:  Dhanteras Dampener: Mumbai Sees Sharp Dip in Property Registrations, Raising Market Questions

The post 📰 Mumbai Real Estate Faces Festive Slowdown: Dhanteras & Diwali Property Registrations Hit New Lows appeared first on Square Feat India.

Despite this fall in volumes, the government earned ₹1,062 crore through stamp duty in May 2025, marking a 3% YoY rise, thanks largely to high-value property deals.

Two-Month Fall in Property Registrations

The following table captures the monthly trend in registrations and stamp duty collections:

While March 2025 witnessed a registration high, the past two months have shown a downward trajectory, both in transaction volumes and government revenue.

Dip in Mid-Segment Sales, Rise in Luxury Market

The breakdown of ticket-size-wise transactions shows a significant decline in mid-segment sales (₹1–5 crore), while luxury properties (₹5 crore and above) saw a sharp increase:

This shift toward luxury housing helped sustain overall revenue despite fewer transactions.

Small Homes Still Lead, But Larger Homes Gain Ground

Most homebuyers continue to prefer compact homes, though interest in spacious apartments is rising:

Market Hotspots Remain Suburban

The Western and Central suburbs dominated real estate activity:

Expert View

According to Shishir Baijal, Chairman & Managing Director, Knight Frank, “In May 2025, Mumbai residential market saw a 4% YoY decline in property registrations, as properties priced between ₹1–5 crore recorded a slowdown in sales momentum. However, this dip did not impact the revenue collection, owing to higher sales velocity for properties priced above ₹5 crore.”

What Lies Ahead?

While Mumbai’s real estate market continues to be driven by genuine residential demand, the two-month decline in registrations — especially in the mid-income bracket — may be an early signal of market fatigue or recalibration. Whether this trend continues into the next quarter will be crucial in understanding if this is just a temporary dip or the beginning of a broader correction.

Also Read: Mumbai Real Estate Market Sees Record Highs in Property Prices

The post Mumbai Sees 2nd Continuous Dip in Property Registrations – Is the Real Estate Bubble About to Burst? appeared first on Square Feat India.

Focus on Infrastructure and Economic Growth
Despite declining real estate activity in the second half of 2024, the sector anticipates the government will prioritize robust infrastructure development, a long-term driver for real estate growth. The budget is also expected to include measures to stabilize the economy and enhance GDP growth, with a focus on supporting SMEs, MSMEs, job creation, and skilling initiatives.

Affordable Housing in Need of Revival
Affordable housing, a once-thriving segment, has struggled post-pandemic, with its sales share in the top seven cities dropping to 18% in 2024 from over 38% in 2019, according to ANAROCK Group data. The supply of affordable homes has also declined significantly.

To address these challenges, industry experts are calling for targeted government intervention, including:

• Reintroducing the Credit-Linked Subsidy Scheme (CLSS): This scheme, which expired in 2022, provided financial incentives for first-time buyers of affordable homes. Its revival could stimulate demand in this segment.
• Restoring the 100% Tax Holiday for Developers: Developers previously benefited from tax exemptions under Section 80-IBA of the Finance Act, 2016, which helped increase affordable housing supply. Reinstating this provision could boost developer interest in such projects.
• Revising Affordable Housing Criteria: Current definitions of affordable housing, particularly the price cap of INR 45 lakh, are considered outdated in high-cost markets like Mumbai. Experts suggest raising the price cap to INR 85 lakh in Mumbai and INR 60-65 lakh in other metros to reflect market conditions.

The Road Ahead
ANAROCK Group Chairman Anuj Puri noted that centrally controlled land managed by agencies such as Indian Railways and the Port Trusts could be released for affordable housing projects, addressing land scarcity issues.

The slowdown in 2024 saw housing sales in the top seven cities decline by 4% to approximately 4.46 lakh units, while new launches dropped by 7% to around 4.13 lakh units. However, stakeholders believe that with the right incentives, 2025 could mark a turnaround for the residential real estate market.

The Union Budget 2025-26 holds the potential to reinvigorate the sector, fostering growth and ensuring housing remains affordable for all.

Also Read: Nirmala Sitharaman to present the union budget

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