In the vibrant real estate market of Thane, near Mumbai, a noticeable shift is taking place. Property brokers like Ashok Ambade, who has dedicated 20 years to this field, report a significant 10-20% drop in buying inquiries over the past six months. His colleague, Vineet Matlani, observes an even steeper decline of 30-35%, especially in the luxury sector, where properties exceed ₹5 crore. To counteract this downturn, developers are introducing enticing offers, such as 30:70 and 20:80 payment plans, in hopes of reviving interest.

Declining Sales Trends

The surge in home sales previously stemmed from a desire for upgrades, fueled by the wealth effect from a booming stock market. However, the Sensex has faced a 14% decline since its peak in September 2022, impacting buyer confidence. According to a recent report by HSBC Securities, while the National Capital Region (NCR) remains relatively resilient, Hyderabad has seen a downturn, evidenced by a drop in both the number of units sold and project launches over the last four quarters.

Moreover, Bengaluru is experiencing a slowdown, with sales dropping for two consecutive quarters despite an increase in new launches. Real estate expert Pankaj Kapoor, managing director at Liases Foras, confirms this trend, noting a 1.5% decline in sales for the third quarter of FY25. He suggests that the market may continue to stagnate or decline, as investors shift away from property purchases due to decreased stock market profits and rising property prices.

Mid-Income Segment Shows Promise

Despite the overall decline, there is a silver lining. The mid-income segment, priced between ₹75 lakh and ₹2.5 crore, is gradually gaining traction. Kapoor notes that government tax concessions for individuals earning up to ₹12 lakh may further stimulate this market. Additionally, Anuranjan Mohnot, CEO at Lumos Alternate Investment Advisors, highlights that stock market losses are causing potential buyers in cities like Ahmedabad to hesitate.

Shifts in Buyer Behavior

Prashant Thakur, regional director at Anarock, points out that while new launches are occurring across cities, the enthusiasm for sales is not as robust as last year. The ongoing layoffs in various sectors have led many prospective buyers to adopt a cautious, wait-and-see approach.

Amit Bagri, CEO at Kotak Mahindra Investments, notes that the purchase cycle has lengthened. Buyers are now taking their time, often visiting properties multiple times before making a decision, a stark contrast to the previous FOMO (fear of missing out) mentality.

Developers Remain Optimistic

On the other hand, leading property developers maintain a more optimistic outlook. Amit Kumar Sinha, managing director at Mahindra Lifespace Developers, asserts that the overall real estate market is showing resilience, with a 6% year-over-year absorption growth. He emphasizes that the majority of their clientele consists of end-users who make informed, long-term decisions.

Rajat Rastogi, CEO at Puravankara, agrees that recent 9-10% salary hikes and decreasing interest rates could positively influence demand. However, he cautions that further declines in the stock market could dampen buyer enthusiasm. According to data from Knight Frank India, property registrations in Mumbai dropped by 4% year-over-year in February, totaling 11,541 registrations. Meanwhile, property prices surged by an average of 21% in 2024 alone, with increases of 10-30% observed between 2021 and 2023.

In conclusion, while the Thane real estate market faces challenges, especially in the luxury segment, there are pockets of opportunity, particularly within the mid-income bracket. As buyers adjust their expectations and strategies, developers continue to adapt to the evolving landscape.