Inventory of unsold Rs 20-50 crore ultra-luxury homes in Mumbai builds up as offtake stalls

The run rate of sales in some marquee projects has slowed down, according to market sources

Sales figures in some ultra-luxury categories in Mumbai, especially those priced between Rs 20 crore and Rs 50 crore, have been falling off, leading to a significant increase in the levels of unsold inventory in that category. A large portion of the ultra-luxury segment in Mumbai is priced in the Rs 20 crore-50 crore bracket, in areas such as Worli, Prabhadevi, Mahalaxmi, Dadar, Mahim and in some suburbs as well, especially Andheri.

Some observers added that developers may have "overestimated" demand in that particular segment, while others said that the new buyers of luxury housing are aiming for even higher ticket sizes, on the back of large, windfall gains from the stock market, especially through a slew of initial public offerings (IPOs) over the past year.

According to data shared by Knight Frank India, 664 units in the Rs 20-50 crore category were unsold in 2024, a significant increase from the 390 units in 2023. Going by the current sales velocity, the current stock in that ticket size will require more than five years to liquidate, according to the real estate consultancy. The value of that unsold inventory currently stands at around Rs 15,000 crore, Knight Frank added.

On the other hand, growth in the unsold inventory levels in the National Capital Region (NCR) and Bengaluru in the Rs 20-50 crore category was largely flat over the same period. However, the size of the market in these two cities is a fraction of Mumbai's.

According to property listings and market sources, a number of developers hold inventory in that ticket size, including for apartments that are fully or partially ready-to-move-in. They include Omkar Realtors, Raheja Universal and Rustomjee, and a number of smaller real estate players as well.

“The luxury segment has certainly captured the spotlight, but we’re beginning to see the shine dull a bit. Buyers have also become smarter and are in the hunt for exceptional value and quality. It’s a fascinating shift in the market, as consumers become more discerning and strategic in their choices," said Chintan Vasani, founder and managing partner at Wisebiz Realty.

Some market sources said the drop-off in sales in marquee projects that are scheduled to be completed in two the three years is showing its effect. "The run rate of transactions has slowed down, and there is already a correction from the prices that were being expected," said a leading real estate broker in Mumbai.

Others say that buyers are aiming for higher ticket sizes when it comes to residential real estate, especially among large investors and promoters of enterprises who have made large gains in recent IPOs, as well as in the unlisted market. Unlike the previous real estate cycle, high net-worth individuals are buying landmark real estate not primarily for speculation and investment but for end-use for themselves and their families.

Recent transactions in areas such as Worli, Malabar Hill and Prabhadevi have routinely climbed above Rs 100 crore each, observers said. In 2024, 192 units were sold that were priced above Rs 50 crore, more than doubling over the year prior, according to Knight Frank data. Recently-listed RR Kabel's promoters, the Kabra family, purchased two homes at Oberoi Realty's 360 West ultra-luxury development in Worli for a combined price tag of nearly Rs 200 crore.

"If we look at the profile of homebuyers in the ultra-luxury category over the past year, many of them, especially large investors, promoters and high net-worth individuals, have made large gains in the stock market, through a number of IPOs that have happened in the past year. For them, the Rs 20-50 crore market represents an aspirational ticket size, and not in sync with their desire for a landmark address, which is why they tend to go for more expensive homes," said Gulam Zia, senior executive director at Knight Frank India.