India's Real Estate Sector Weathers Seasonal Slowdown, Experts Optimistic

According to the latest analysis, India's real estate sector remains in a growth cycle despite a July slowdown in launches. Gulam Zia, Senior Executive Director at Knight Frank India, believes the weakness is seasonal and not indicative of a structural downturn.

The residential market, which accounts for around 80% of the sector, has seen a steady performance so far this year, matching the previous year's numbers. However, the affordable housing segment remains undersupplied, while ultra-luxury properties face some stress. Homes priced below ₹50 lakh are selling out quickly, but projects in the ₹20-50 crore bracket could take up to five years to clear.

The office market, on the other hand, continues to thrive. Last year saw 70 million square feet of space absorbed, and this year is on track to reach 85 million. Rentals are also rising by 5-7% on average, with Bengaluru and Mumbai seeing double-digit growth. Zia noted that the office sector has not been affected by tariff wars or global uncertainty, and is "doing fabulously well."

In the retail segment, the picture is more mixed. While major cities like Mumbai, Delhi, and Bengaluru are seeing seven to ten malls performing fairly well, with two or three exceptional performers, smaller cities face pressure from excess mall supply. Zia cautioned that having a third or fourth mall in these smaller markets can be "serious trouble."

Overall, the real estate sector in India appears to be weathering the seasonal slowdown, with experts remaining optimistic about its long-term growth prospects.