Mumbai's luxury realty loses sparkle as buyers slip into pause mode

Mumbai - home to industry titans, Bollywood stars - is witnessing a slow offtake of houses priced between ₹10 crore and ₹50 crore. Industry insiders and real estate watchers explained the phenomenon

Global uncertainties and volatile equity markets have started impacting Mumbai’s luxury and ultra-luxury realty housing. The financial capital of India, in contrast to the other big realty market of Delhi-NCR, shows a much higher inventory pileup in luxury housing. The supply is clearly exceeding the demand at a time when buyers are in a wai- and- watch mode in the Maximum City.

 

Mumbai — home to industry titans and Bollywood stars — is witnessing a slow offtake of houses priced between ₹10 crore and ₹50 crore. Industry insiders and real estate watchers explained the phenomenon.

 

“Large real estate purchases typically slow down against such a backdrop, which could present as an inventory buildup in the luxury segment,” said Vinod Goenka, chairman and managing director (MD) at Valor Estate, a Mumbai-based real estate firm.

 

Chirag Mehta, founder at Arbour Investments, said that buyers’ purchase decisions were more discretionary and often influenced by broader financial and economic signals.  

 

“Over the last six months, we’ve seen heightened volatility in the equity markets, both domestically and globally. In such environments, investors across asset classes tend to become more risk-averse,” he added.  

 

In the past six months, the BSE Sensex has dropped 7.87 per cent, while the Nifty 50 has declined 8.77 per cent. Nifty Vix (India volatility index) has surged by about 52.10 per cent during the same period.

 

As of the first quarter of 2025, the inventory of unsold apartments priced between ₹10 crore and ₹20 crore in Mumbai is estimated to take almost four years (16 quarters) to get sold. Apartments priced anywhere between ₹20 crore and ₹50 crore may take even more than four years to be absorbed in the market, according to Knight Frank India. 

 

The real estate consultancy added that the number of unsold properties priced between ₹10 crore and ₹20 crore increased by about 44 per cent from 1,999 in the first quarter of 2023 to 2,879 as of March 2025. Meanwhile, the number of properties priced between ₹20 crore and ₹50 crore more than doubled from 496 to 1,031 in the same period.  In Delhi NCR, the inventory in the ₹10 crore to ₹20 crore segment is estimated at 9.1 quarters, while that in the ₹20 crore to ₹50 crore band gets cleared in about 5.3 quarters. The inventory priced over ₹50 crore is likely to take 9.3 quarters to get sold in NCR, analysts said.

 

In some other markets, like Ahmedabad in the ₹10 crore to ₹20 crore segment, and Pune, Kolkata, and Hyderabad in the ₹20 crore to ₹50 crore segment, unsold inventory ranges between 15.5 quarters and 41.5 quarters. However, compared to Mumbai, the market for houses priced between ₹10 crore and ₹50 crore in these cities is very small, Knight Frank pointed out.

 

As for Mumbai, it has 231 apartments priced over ₹50 crore as of March 2025 that may take six quarters to be sold. The number of unsold units in this segment has increased by 43 per cent year on year.  Sales of houses priced over ₹50 crore declined by 22 per cent this quarter versus last year.

 

A real estate project takes 12-18 months for planning, design, and approvals and another two to three years for construction. A project is planned considering the market demand at the time of project planning.  “The supply has exceeded demand, and therefore, the developers will have to revise their strategies and manage the demand-supply equation a lot better,” said Vivek Rathi, national director – research, Knight Frank India.

 

Developers reassessing strategies

 

Developers would have responded to the trend. The launches in the ₹10 crore to ₹20 crore segment in Mumbai fell by 24 per cent year on year in the first quarter of 2025 and by 9 per cent in the ₹20 crore to ₹50 crore segment.   

 

Meanwhile, launches of homes priced over ₹50 crore declined by 91 per cent year on year, according to Knight Frank India estimates.

 

Before the Covid-19 pandemic, the real estate market was witnessing a downcycle. However, post-Covid, the government of Maharashtra’s decision of stamp duty waiver lifted the sector’s momentum in Mumbai. Developers had to come up with more supply as the sales increased.

 

Mumbai recorded sales of 53,208 real estate properties in 2023, one of its best years, as per PropEquity. But in 2024, the sales declined to 50,140. In the first quarter of 2025, the sales in Mumbai declined by 36 per cent year on year.

 

The sector is witnessing a slowdown due to rising housing prices and global headwinds like ongoing geopolitical tensions and a weak global economy, property consultancy firm Anarock said.

 

“Our own input costs remain elevated, and location-specific demand still holds. Rather than cutting prices, we’re innovating through bundled offerings and after-sales experiences,” said Rohan Khatau, director, CCI Projects, a Mumbai-based real estate developer and construction firm.

 

Overall, the city’s average property rate saw a decline. But not all developers agree on lowering prices. Manan Shah, managing director, MICL Group, believes that for financially sound and strategically positioned developers, there is no pressing need to resort to price corrections.

 

“While the demand may fluctuate a bit, the price will remain competitive and rise in the times to come,” stated Dhaval Ajmera, director, Ajmera Realty & Infra India.