India's Real Estate Sector Continues Growth Despite July Dip: Knight Frank's Gulam Zia
India’s real estate sector remains in a growth cycle despite a July slowdown in launches, according to Gulam Zia, Senior Executive Director at Knight Frank India. He believes the weakness is seasonal and not indicative of a structural downturn.
Overall, about 80% of the real estate sector is residential, with the rest being offices and retail. So far, the first three quarters have been pretty much equal to last year’s year-on-year numbers, so nothing to worry about, Zia told CNBC-TV18. He added, Some say we are close to the 12 o’clock position on the property clock. But I don’t think we’re there yet—maybe at 11 o’clock. We need to pause, reflect, and watch the next couple of quarters.
On the retail front, Zia said the segment has remained steady, though tier-2 and tier-3 cities face pressure from excess mall supply. In Mumbai, Delhi, Bengaluru, seven to ten malls are doing fairly well, with two or three performing exceptionally well. But in smaller cities, having a third or fourth mall can be serious trouble.
The office market, on the other hand, continues to perform strongly. 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. So far, the office sector has not been affected by tariff wars or global uncertainty. For now, it is doing fabulously well, Zia said.
In residential real estate, affordable housing remains undersupplied, while ultra-luxury properties face some stress. Homes priced below ₹50 lakh are selling out within two years, but projects in the ₹20–50 crore bracket could take up to five years to clear. Overall, unsold inventory remains healthy, with an average absorption period of 2.5 to 3 years.
Zia also noted that city-wise trends differ. While Mumbai’s July sales matched last year’s levels, Delhi and Bengaluru have been weak, whereas Chennai and Pune are showing strong growth.
On concerns around the July slowdown highlighted by Morgan Stanley, Zia dismissed them as temporary. I would not be unduly worried, because in a few days we will be entering the shraadh paksha. This is the period when transactions typically take a backseat. Post that, during Dussehra and Diwali, we’ll see huge interest coming back. This is just a temporary blip, nothing more than that.
