India’s housing market remains stable, with unsold inventory in the top eight cities rising only 4% year-on-year. However, unsold homes in the ₹2–5 crore range have jumped 47%, revealing a slowdown in the luxury segment. Experts suggest this reflects portfolio expansion, not distress, though excess stock could limit price growth.
End users benefit from lower costs, while investors face slower returns and longer holding periods. High-inventory markets pose liquidity and resale risks, making diversification crucial. Overall, the premium segment requires cautious navigation, with a focus on yield optimisation, long-term stability, and strategic investment across property types.
Rise in Upscale Residences
Anarock shows that since 2019, when COVID-19 first surfaced, the premium and luxury segments have grown sharply. Their share of total sales surged from 7 per cent in Q1 2019 to 21 per cent in Q1 2024, a trend that has continued into 2025.
What is Leading to The Rise in Premium Inventory?
Industry specialists stress that the increase in premium unsold inventory suggests portfolio growth rather than distress.
How Do We Measure Inventory?
Using the QTS ratio, we evaluate inventory levels by estimating how long it will take to sell the current stock at the existing rate.
How Does A Rise in Unsold Inventory Influence Housing Prices?
In the mid and premium sectors, a surplus of unsold inventory often hinders price growth. When competition intensifies, buyers gain leverage, and developers tend to delay new launches due to cash flow constraints.
When Excess Inventory Resulted in Stable Prices
A related trend took place a decade ago. In 2015, Mumbai had more than 175,000 unsold units, keeping prices unchanged despite widespread discounts, with inventory lasting over 50 months. Delhi-NCR had an even larger issue, with over 200,000 unsold units remaining for close to four years.
Who Experiences More Impact, End-users or Investors?
High inventory affects end users and investors differently. “Homebuyers often gain from better affordability and stronger bargaining power, while investors face lower rental yields, slower capital appreciation, and longer holding periods. The impact is typically sharper in premium and luxury segments, where demand recovery takes more time,” As stated by Anupam Rastogi, co-founder and chief business officer of NRI Real Estate, Square Yards.
Dangers for People Entering High-Inventory Micro Markets
A primary concern for end-users is the project’s financial health, particularly if the developer is experiencing liquidity issues. “Delays in completion or community development can hinder neighbourhood growth and infrastructure, while market perceptions may impact future resale value and financing options,” states Rastogi.
Precautionary Steps for Users
In markets with high inventory, buyers can have more negotiating power, but they should avoid buying solely on anticipated price increases.
Safety Measures for Investors
Investors need to consider longer holding times, slower price growth, and reduced rental returns in markets with high inventory. “Investors should stay cautious, though long-term opportunities may exist in distressed or undervalued assets. Emphasis should be on yield optimisation, portfolio diversification, and a balanced, counter-cyclical investment approach,” mentions Rastogi.
The housing market in India is mostly stable, yet the luxury segment is seeing a temporary rise in inventory. Homebuyers and investors ought to navigate these situations with careful diligence, strategic variety, and a long-term view to make informed choices and boost returns.
Read more through the links below to uncover the key trends and market leaders driving this growth:
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Published Date: 11 Nov, 2025
