“Buying the dip” is a phrase used when purchasing a stock once it has fallen in value and is considered the one of the core fundamentals of stock market investing. Although a dip or correction in real estate prices doesn’t occur as frequently as it happens in the world of stocks, it’s a great opportunity for retail investors to secure their future by investing in one of the most stable investment avenues in the world.   

From the global financial crisis of 2008, demonetization in 2016, COVID-19 induced pandemic in 2020 to the decline in housing sales in March 2025, the relatively stable real estate sector is poised to witness increasing inflow of retail investors capitalizing on the current dip which is expected to stabilize prices for a while. Industry data suggests that the housing supply in the top nine cities fell by 34 percent while sales declined by 23 percent in the first three months of 2025 after a record bull run, led by a correction occurring on the back of high property prices and elevated interest levels. This is expected to deter developers from aggressively launching new projects to bring down unsold inventory to a healthier level.

As per real estate property consultants Liases Foras and Colliers, there was about 1 million unsold housing units at the end of the third quarter of the calendar year 2024 (Q3 2024) across the top eight Indian cities - Mumbai Metropolitan Region (MMR), Delhi National Capital Region (NCR), Bengaluru, Chennai, Hyderabad, Kolkata, Ahmedabad, and Pune. This can primarily be attributed to the record-high sales witnessed in the last two years, thereby making developers optimistic about continued high traction in demand and leading to increased supply across affordable, mid, luxury, and ultra-luxury segments.

This dip in supply and sales along with slow addition of new inventory is expected to keep price increase at bay for a few quarters which will attract retail investors and homebuyers to invest in the residential segment.

In Q3 2024, as per Industry data, the new housing supply witnessed a 19 per cent year-on-year (Y-o-Y) drop, falling below the 100,000 mark for the first time since Q1 2023. During the quarter, the sales also declined 11 per cent Y-o-Y. Further, of the total 1 million unsold units, affordable and middle-income categories cumulatively accounted for almost two-thirds of the unsold inventory.

Best time to acquire affordable housing units

The demand for affordable houses (< Rs 40 lakh) is gradually improving across the top 7 cities after a lull of several years which was primarily led by factors such as circle rates going up, non-availability of interest subsidy under Pradhan Mantri Aawas Yojna (PMAY), overall rise in construction costs, along with low margins. Industry study suggests that the unsold stock of affordable homes fell by 19% to 1.13 lakh units at the end of the first quarter of calendar year 2025, from around 1.40 lakh units at the end of the first quarter of calendar year 2024.

While Bengaluru, Chennai and Pune saw a steep decline of 51%, 44% and 28% respectively in the first quarter of calendar year 2025 as against same time period last year, Hyderabad was the only market which posted a 9% increase in the unsold inventory in the affordable housing segment. This highlights a growing preference of customers capitalizing on the expected stability in prices before unsold inventory reaches a certain threshold which necessitates a price increase.

Intertwiningly, the case of rising unsold inventories has impacted both ends of the spectrum - affordable and luxury housing while the mid-premium segment continues to witness traction. An industry report suggests that a cumulative total of around 5,59,808 units were unsold across the top seven cities with around 1,12,744 units falling in the affordable housing category, whereas the luxury segment accounted for 1,13,193 unsold units.

Also Read: Indian Real Estate Draws $1.4B Domestic Investment in H1 2025, +53% YoY: Colliers 

Luxury housing in the same boat

In line with the larger industry trend, the luxury housing segment, which expanded significantly after the pandemic with its sales share rising from 7 percent in 2019 to 26 per cent in 2024, and new supply share doubling from 11 per cent to 26 percent, is witnessing a substantial increase in unsold inventory. Data suggests that units priced over Rs 1.5 crore saw a 24% increase in unsold stock, rising from 91,125 units at end of the first quarter of calendar year 2024 to over 113, 000 units in the first quarter of calendar year 2025, fueled by increased supply and cautious investor sentiment amid the ongoing global economic uncertainty.

Here, Kolkata and the National Capital Region (NCR) saw the highest rise in unsold luxury inventory among the top seven cities at 96% and 78%, respectively, followed by Bengaluru, which saw its unsold units rise by 57 percent. Only two markets namely Chennai and Pune saw their unsold luxury stock decline in this period, by 4% and 11%, respectively.

These trends therefore boil down to the fact that this is an ideal time to invest in affordable and luxury housing to capitalize on the prevailing prices before supply subsides to healthy levels and a price increase happens. This also assumes significance as input costs such as land prices, circle rates and the cost of construction continue to grow consistently, and developers will have to share the burden with homebuyers sooner or later.

About the Author

Bhavesh Kothari is a seasoned real estate professional with over 13 years of experience. In 2017, he founded Property First Realty, a Bengaluru-based real estate consulting firm specializing in luxury residential and commercial properties. The firm is known for its selective property selection, focusing on appreciation potential, builder reputation, and community livability. With 70% of its clients being repeat customers, Property First operates in multiple cities, including Dubai, Mumbai, Pune, Goa, Hyderabad, Chennai, and Delhi NCR, with plans for further expansion.