Construction Slowing Down: Experts Raise Concerns Over India's Real Estate Market

Despite the glossy headlines and soaring stock prices, experts from Liases Foras are sounding the alarm over the Indian real estate market. The latest Residential Market Report highlights a significant slowdown in construction across major cities. This trend is raising concerns about the sustainability and health of the real estate sector in India.

The report by Liases Foras, a leading data analytics company, has come out with a warning that cannot be ignored. It shows a widening gap between new project launches and actual construction on the ground. The statistics are alarming: construction has slowed sharply across the top eight cities in India. The share of constructed supply versus total marketable supply has dropped dramatically from 75% in 2017 to just 57% in 2025.

This decline in construction activity is particularly troubling given the high expectations and the recent surge in stock prices of listed developers. The discrepancy between market performance and on-ground reality raises questions about the long-term viability of the real estate sector. Sanjay Dutt, MD & CEO of Tata Realty and Infrastructure, joins us to delve deeper into the issue and provide insights.

One of the key factors contributing to the slowdown in construction is the ongoing liquidity crunch in the sector. Many developers are facing difficulties in securing funding, which has led to delayed or stalled projects. Additionally, the regulatory environment has become more stringent, with the implementation of the Real Estate (Regulation and Development) Act (RERA) and other measures aimed at bringing transparency and accountability to the industry.

Another challenge is the high cost of land and raw materials, which has put additional pressure on developers. This, combined with the economic slowdown and reduced consumer confidence, has led to a decrease in demand for new properties. The result is a vicious cycle where reduced demand leads to fewer new projects, which in turn leads to a slowdown in construction.

The implications of this slowdown are far-reaching. For one, it could lead to a significant increase in the number of unfinished or delayed projects, which could have a detrimental impact on homebuyers and investors. It could also lead to job losses in the construction and related sectors, further exacerbating the economic slowdown.

To address these issues, experts suggest that the government and industry players need to work together to find solutions. This could include measures to improve liquidity, reduce the cost of land and raw materials, and streamline the regulatory environment. Additionally, there is a need for more transparent communication between developers and stakeholders to manage expectations and build trust.

Sanjay Dutt, MD & CEO of Tata Realty and Infrastructure, emphasizes the importance of a collaborative approach. He suggests that the industry needs to focus on innovation and efficiency to overcome the current challenges. This could involve adopting new technologies, such as prefabrication and modular construction, to reduce costs and improve construction timelines.

In conclusion, the slowdown in construction in India's real estate market is a cause for concern. While the sector has shown resilience in the past, the current trends highlight the need for immediate action to ensure its long-term sustainability. The government, industry players, and stakeholders must work together to address the underlying issues and restore confidence in the market.