MANGALURU: Real estate professionals along the coast are raising concerns about a growing disparity between the expectations of homebuyers and the offerings from developers. The most significant shortfall is evident in the demand for 3BHK apartments priced at Rs 1 crore or below, although certain segments of 2BHK and premium properties are witnessing an oversupply.
DB Mehta, president-elect of CREDAI Karnataka, noted that buyers have shifted their preferences towards larger homes post-pandemic. However, new developments have not aligned with these preferences. “The most pronounced mismatch exists in the sub-Rs 1 crore 3BHK segment, where demand remains robust, but the inventory is scarce. A similar trend is seen in the 2BHK market, particularly below Rs 65 lakh, where supply is also limited,” he remarked.
Despite these shortages, Mehta highlighted that overall inventory for 2BHK apartments is excessive, indicating that much of the available stock is priced above what buyers find acceptable. This creates a scenario where the apparent supply level seems adequate, but the product offerings do not match buyers’ budgets, resulting in slower sales for some projects and faster absorption in specific price ranges.
Mehta also pointed out that the premium apartment sector, particularly properties priced between Rs 1.5 crore and Rs 4 crore, has seen strong interest over the last four years, primarily from high-net-worth individuals and NRIs. However, he anticipates a slowdown in this segment by 2026, as supply outpaces demand, potentially leading to longer selling periods and increased competition among projects.
Rents for standard 2BHK and 3BHK apartments have surged by approximately 15% in 2026, attributed to a lack of widely sought configurations and scarcity in popular locations.
Stakeholders have noted significant differences in micro-markets across the city. Areas like Falnir, Attavar, Valencia, Jeppu, and Mannagudda are experiencing limited supply, while Kadri, Bejai, and Urwa are facing oversupply. This reinforces concerns that both location preferences and unit types are not aligned with consumer demands.
Vinod Pinto, president of CREDAI Mangaluru, stated that apartment prices within city boundaries are escalating due to land scarcity and increased raw material costs, rendering homes unaffordable for many. “Land availability is limited in the core city, and many buyers are hesitant to move to the outskirts where land is more affordable. Furthermore, developers struggle to initiate large projects outside Mangaluru City Corporation limits due to inadequate basic infrastructure like drainage. Improvements in drainage, water supply, and connectivity could encourage buyers to consider locations further out,” Pinto explained.
