NEW DELHI: Crisil Ratings predicts that residential real estate sales growth will moderate to 4–6% in FY27, following a robust post-pandemic surge, as rising property prices affect demand.
After achieving a compound annual growth rate of 26% in sales value from FY22 to FY25, growth is projected to slow to 5-7% for FY26.
Gautam Shahi, director at Crisil, remarked, “The ongoing rise in housing prices is likely to lead to stagnant demand growth of 0–2% in FY27, despite supply continuing to outpace demand.”
Inventory levels are anticipated to increase to 3.2–3.4 years in FY27, compared to under three years in the last two fiscal years.
Price growth is also expected to decelerate to 3–5% in FY27, following a CAGR of 11% between FY22 and FY25 and a projected 7–9% increase in FY26.
The premium and luxury housing sectors are expected to be significant demand drivers, representing 38-40% of new launches in FY27, up from around 12% in FY22.
Despite a slowdown in sales growth, the credit profiles of developers are anticipated to remain stable, bolstered by consistent collections and strong operating cash flows.
Pranav Shandil, associate director at the firm, noted that developers are likely to keep their debt levels manageable, with a debt-to-cash flow from operations ratio projected at 1.1–1.3 times in FY27.
