Unsold super-luxury homes pile up as supply outpaces demand

NCR witnessed a sharper, 16-fold increase, from just 12 units to 192 units during the same period. Across India’s top eight cities, unsold inventory in the Rs 20-50 crore segment surged 86% over two years, from 857 units in Q3 2024 to 1,593 units in Q3 2026. Inventory rose 65% in the past year alone. The growing stock of unsold homes is also pushing up the time developers need to clear their inventory.

Vivek Rathi, national director, research, at Knight Frank, said the inventory overhang in this segment has climbed to 14 quarters from eight quarters two to three years ago. “In some markets, inventory has overtaken demand,” Rathi said. Inventory overhang, measured in quarters to sell (QTS), indicates how long it would take to sell existing unsold homes at the prevailing pace of sales. Industry experts attribute the rising inventory partly to aggressive launches by leading developers, many of whom have acquired land at steep valuations.

“Every top developer is launching luxury projects. There is a limit to what the market can absorb,” said Prashant Thakur, executive director and head of research and advisory at Anarock Property Consultants. With developers having bought land at high prices, launching luxury projects has become a logical choice to protect margins, he said. Developers such as Godrej Properties and Oberoi Realty have launched super-luxury projects in Mumbai and NCR this year.

According to Knight Frank, launches of homes priced between Rs 20 crore and Rs 50 crore jumped 196% year-on-year to 981 units in 2026 year-to-date. Thakur, however, does not believe the segment is facing an oversupply yet. “But if developers continue launching at this pace, there could be a glut in the future,” he cautioned. He also pointed to changing investment preferences among high-net-worth individuals (HNIs), who now have a wider range of opportunities, including start-ups, real estate investment trusts (REITs) and private equity.

“They need not invest only in properties like earlier,” Thakur said. Rathi attributed the near-term moderation in demand partly to weakness in equity markets, which has prompted wealthy buyers to take longer to make purchase decisions. “It does not mean they cannot afford these homes. They are just taking more time to decide,” he said. Ultra-rich buyers are financially savvy, conduct detailed due diligence and are unlikely to be swayed merely by promises of price appreciation or promotional offers, he added.

Oversupply concentrated in select micro-markets Developers and financiers, however, caution against viewing the inventory build-up as a market-wide phenomenon, arguing that demand and supply vary significantly across locations. Aditya Virwani, managing director at Embassy Developments, said the overhang is largely micro-market-specific. “Worli has an oversupply, with many homes priced at Rs 15 crore and above.

But land is so scarce in Mumbai that anything in locations such as Juhu, we would lap up,” Virwani told FE. He added that pockets of Gurugram are also witnessing excess supply, with hardly any homes available below Rs 3 crore. Amit Bagri, managing director at Kotak Mahindra Investments, said the reasons for rising inventory differ across cities. In Mumbai, prices in premium sea-facing locations such as Bandra and Juhu have climbed to Rs 70,000-Rs 1 lakh per sq ft, narrowing the pool of potential buyers.

“If you are paying Rs 1 lakh per sq ft, you would not want to live in a two-bedroom apartment. You would want at least 2,000 sq ft, which means spending Rs 20 crore,” Bagri said. Prices of premium sea-facing homes in locations such as Worli have doubled over the past five years, he added. Increased competition is another factor weighing on the market. “Earlier, there were only one or two luxury developers in South Mumbai.

Now, many players have entered,” Bagri said. In NCR, soaring land costs have forced developers to launch projects at significantly higher prices. Land prices in the region have risen three to four times over the past four years, he said. Bagri also flagged a serious slowdown in Hyderabad’s property market. Not all developers see the growing inventory as a sign of weakening fundamentals in the luxury housing market.

Irfan Razack, chairman and managing director at Prestige Estates Projects, acknowledged the increase in luxury housing supply in markets such as Mumbai and Bengaluru but said the key question was whether projects could attract sufficient demand. “What ultimately matters is the depth of demand and the ability of the market to absorb well-located, well-designed projects at the right price points,” Razack said.

He maintained that buyers continue to show strong interest in differentiated luxury offerings. “Our experience has been that there is strong demand for differentiated luxury products in the right locations. For instance, our luxury projects such as Prestige Nautilus and Prestige Ocean Towers in Mumbai have seen a very strong market response,” he said.