The recent realization on the part of the Gurgaon administration to refrain from increasing the circle rates in FY ’26 comes after the market experienced slowdown in the last two quarters. amidst runaway residential  prices. This may well come as some reprieve but the big question is what lies ahead for the Gurgaon market which has seen brakes being put on the property boom .

Vinod Behl

Housing prices across cities , according to Credai-Colliers- Liases Foras report, have been on a continuous upward trend for 16 consecutive quarters since 2021. Delhi-NCR  including Gurgaon . has been leading the pack, with 81 percent increase over the last 5 years, as per Anarock report, with Gurgaon recording 84 percent rise.

In 2024, a hype was created around INR 1 lakh crore  of housing sales in Gurgaon, accounting for over 66% of total sales value in Delhi-NCR, only next to Mumbai in sales value. The fact  has been that this was due to the increase in sale of super luxury homes costing up to INR 100 crore a unit. whereas actually the overall volume of sales had gone down. Gurgaon as per industry data, saw 16% YoY decline in housing sales in Q3 2024, as part of broader trend of sales dip across cities. In  Q1 2025, housing sales have gone down by 28% , as per Anarock data.

Across cities, steep hikes in residential prices have a lot to do with  sharp rise in land prices due to rampant  land buying by many big branded developers, besides increase in construction and labour  cost . But in NCR including Gurgaon, the marketing and sales  practices of subvention schemes , Expression of Interest (EOI) and underwriting of a part of inventory, led to artificial price escalation. Gurgaon market which used to be a healthy end-user driven  market till about 5 years back has today become largely investor-driven and unaffordable.

Despite all the hype created about rising disposable income, there is a wide gap between income and home price.Today, Delhi-NCR , besides MMR, is the least affordable market with a price to income (PI) ratio of 10.1. In top 10 cities, between 2020-2024, household incomes grew at a CAGR of 5.4 whereas property prices surged at a CAGR of 9.30. EMI to monthly income ratio rose from 46% in 2020 to 61% in 2024, reflecting growing EMI  burden. Gurgaon has the highest EMI to monthly income ratio of 61%.

What has made matters worse is that supply of affordable and mid-segment homes (priced up to INR 50 lakh and between INR 50 lakh and INR 1.5 crore)  has significantly declined. There is a drop of 36% in the affordable and mid-segment priced up to INR 1 crore as developers shifted focus to larger and more luxurious homes with high ticket prices. But now what is worrying is that besides decline in absorption of affordable and mid-priced homes due to low inventory, housing sales in the luxury segment have also gone down. Anarock report has revealed that 5 top cities have witnessed a rise in unsold stock in luxury housing above INR 1.5 crore in the first quarter of 2025.

Developers are now gradually  realizing the gravity of the situation, with the real estate market going unaffordable and real estate companies not providing  supply in the sweet segment of affordable and mid- priced housing.  Irfan Razack, Chairman, Prestige Estates has gone on record to say, ” Most of the customers are in the lower and middle segments which have seen a demand-supply mismatch . We are looking to offer more products in the mid-segment residential space and suitable apartment sizes will be planned across some of our new developments”.

Going forward we will see that in order to beat any slowdown and keep the sales momentum going, more and more developers will reduce home sizes, especially in Delhi- NCR( particularly Gurgaon ) to keep lower ticket prices. We will see many developers even resorting to price discounts to push sales.We  are already seeing the trend of developers moving to Gurgaon’s suburban Tier-2 towns of Haryana like Sonepat, Panipat , Faridabad, Rohtak to take advantage of lower price in order to offer more affordable housing.Though Delhi-NCR and Gurgaon is a fundamentally strong market, a lot will depend upon how Gurgaon maintains  a fair balance between affordable , mid-priced/premium and luxury housing and ensures a healthy mix of end-users and investors.