GRI InstituteIndia's Residential Market Demands New Agility from Developers
As post-COVID buyers shift from affordable to larger homes, developers must adapt their product mix in real-time to drive sales
October 28, 2025Real Estate
Written by Jorge Aguinaga
The Indian residential market has undergone a fundamental recalibration since 2020 and consumer preferences have shifted so significantly that pre-pandemic product strategies - even with former mainstays such as affordable housing - are no longer a guarantee of success and face significant headwinds.
In this new environment, sales velocity is paramount and achieving it no longer hinges on a static, long-term plan. Instead, success is found in a dynamic approach that requires developers to remain agile, listen intently to on-ground feedback, and be willing to change their product mix in real-time.
In stark contrast, the upper-mid ticket size, defined as homes in the INR 1.5 to 2.5 crore range, is experiencing high sales velocity, forcing a strategic pivot away from the affordable segment to focus on mid-market and mid-premium products where consumer demand is proven.
Larger homes and outdoor spaces have become a part of the basic necessity, and projects that lack them are struggling to sell. This shift has effectively recalibrated the market, where what might have been considered "luxury" in terms of size or ticket price before the pandemic is now viewed as the new normal, while luxury has moved to another level.
This was particularly notable in the surge in demand for larger configurations such as 3BHK (three-bedroom, hall, and kitchen) units, which in some cases became the fastest-selling inventory.
Panelists at India GRI 2025 noted that developer agility in adapting the product mix is now critical for success in the residential market. (GRI Institute)
However, after consulting with brokers on the ground, they found the opposite, as the 1BHKs were selling precisely because there was nobody else there. By bucking the macro trend and listening to the micro-market, the developer found a valuable and uncontested niche.
This reinforces the core message that in a cyclical market where demand shifts every few quarters, developers must keep an ear on the ground to maintain awareness of what is happening and be prepared to adapt on the fly.
We extend our thanks for these strategic insights to the participants of the panel discussion on "Rethinking Residential Returns - Balancing Portfolios Across Ultra-Luxury, Aspirational, Mid-Income, and Affordable Housing," at India GRI 2025.
The session was moderated by Sandeep Kotak, MD & CEO at Mango Advisors, and featured reflections from leading experts including Atul Bohra, Group Chief Executive Officer at Kolte Patil Developers; Gopal Krishnan, Executive Director & CEO at Shriram Properties; Lakshmipathi Chockalingam, Senior Managing Partner at ASK Property Fund; Pavan Kumar, Founder & CEO at White Lotus Group; Roshan Banka, Managing Director at Ares Management; and Shailesh Puranik, Chairman & Managing Director at Puranik Builders Ltd.
Key Takeaways:
- The affordable housing segment is struggling as strong demand pivots to mid-market and premium residential products.
- Success now depends on a dynamic approach, forcing developers to adapt their product mix in real-time to match shifting consumer demand.
- Post-COVID buyers now expect larger homes and specific amenities, recalibrating what is considered a "basic necessity" in the market.
The Indian residential market has undergone a fundamental recalibration since 2020 and consumer preferences have shifted so significantly that pre-pandemic product strategies - even with former mainstays such as affordable housing - are no longer a guarantee of success and face significant headwinds.
In this new environment, sales velocity is paramount and achieving it no longer hinges on a static, long-term plan. Instead, success is found in a dynamic approach that requires developers to remain agile, listen intently to on-ground feedback, and be willing to change their product mix in real-time.
Affordable Housing Segment Underperforms
A primary driver of this change is the clear and consistent underperformance of the affordable housing segment. Reports from the market indicate that even in the INR 75 lakh to INR 1.25 crore bracket, sales are simply "not happening".In stark contrast, the upper-mid ticket size, defined as homes in the INR 1.5 to 2.5 crore range, is experiencing high sales velocity, forcing a strategic pivot away from the affordable segment to focus on mid-market and mid-premium products where consumer demand is proven.
Consumer Demand Shifts to Larger Homes
The pandemic did not just change what price point consumers would buy at; it also changed what they expect from a home. Pre-COVID, the trend was towards smaller, optimised units where features like decks were often value-engineered out, but that trend has completely reversed.Larger homes and outdoor spaces have become a part of the basic necessity, and projects that lack them are struggling to sell. This shift has effectively recalibrated the market, where what might have been considered "luxury" in terms of size or ticket price before the pandemic is now viewed as the new normal, while luxury has moved to another level.
This was particularly notable in the surge in demand for larger configurations such as 3BHK (three-bedroom, hall, and kitchen) units, which in some cases became the fastest-selling inventory.
Panelists at India GRI 2025 noted that developer agility in adapting the product mix is now critical for success in the residential market. (GRI Institute)Case Study: Adapting Product Mix in Real-Time
This new reality demands constant adaptation, as a compelling case study illustrates:- Initial Launch: A project was launched with a product mix heavily weighted towards smaller units: 60% 2BHKs and only 20% 3BHKs.
- Market Feedback: The market response was immediate and decisive, with all the 3BHKs selling out on day 1 while 20% of the 2BHKs sold.
- Phase 2 Pivot: In response, the developer modified the plans for Phase 2, introducing much larger 2,600 square feet units to meet the clear demand.
- Continuous Adaptation: The agility did not stop there, as rising prices over time caused this new, larger unit to become "slow moving". Demonstrating true adaptability, the team again downsized the unit in Phase 3 and Phase 4 to align with what the market could absorb at the new price point.
Micro-Market Niches Prove Profitable
While broad trends point towards larger homes, agility also means knowing when not to follow the crowd. In Pune, for example, the widely accepted wisdom was that 1BHKs had absolutely no sale, and internal teams even pressured one developer to stop constructing them.However, after consulting with brokers on the ground, they found the opposite, as the 1BHKs were selling precisely because there was nobody else there. By bucking the macro trend and listening to the micro-market, the developer found a valuable and uncontested niche.
This reinforces the core message that in a cyclical market where demand shifts every few quarters, developers must keep an ear on the ground to maintain awareness of what is happening and be prepared to adapt on the fly.
We extend our thanks for these strategic insights to the participants of the panel discussion on "Rethinking Residential Returns - Balancing Portfolios Across Ultra-Luxury, Aspirational, Mid-Income, and Affordable Housing," at India GRI 2025.
The session was moderated by Sandeep Kotak, MD & CEO at Mango Advisors, and featured reflections from leading experts including Atul Bohra, Group Chief Executive Officer at Kolte Patil Developers; Gopal Krishnan, Executive Director & CEO at Shriram Properties; Lakshmipathi Chockalingam, Senior Managing Partner at ASK Property Fund; Pavan Kumar, Founder & CEO at White Lotus Group; Roshan Banka, Managing Director at Ares Management; and Shailesh Puranik, Chairman & Managing Director at Puranik Builders Ltd.