India’s property market is enjoying one of its busiest periods in years, yet the new towers rising across major cities are running into a simple constraint. Construction cannot match the pace of launches. Developers are selling fast, investors are confident, and prices in the mid to upper segments continue to rise, but the supply of finished homes is growing at a slower rate.
Hari Yellina, a real estate investor based in Melbourne and The Indian Sun‘s real estate editor, sees echoes of a deeper transition. “When I left India, 80 per cent of the workforce was in agriculture. Now it’s around 45 per cent,” he said. “India has about 35 per cent moving to cities and population growth has added another 200 million in the last 20 years.” The shift has reshaped demand. As incomes rise, buyers want two- and three-bedroom homes, and construction standards have improved. “It’s not just concrete and bricks. High-rise construction is following some what Western standards,” he said.
India’s workforce mobility is adding to the pressure. “If they get some good skills, they are going to Middle East as construction workers,” he said, citing better wages and the appeal of overseas employment. Compliance requirements now demand more workers on site. Better machinery is helping, but labour remains tight. “Construction is outpacing demand,” he said. Older housing stock is part of the story too. “A lot of Indian houses pre 2005 are sub standard houses, they all need to be rebuilt.”
Fresh data reported by Mint, a Mumbai-based media platform, points to a widening gap. Liases Foras, a leading data analytics company, has come out with a warning you cannot ignore. Its latest Residential Market Report shows a widening gap between new project launches and actual construction on the ground. Construction has slowed sharply across the top eight cities. The share of constructed supply versus total marketable supply has dropped from 75 per cent in 2017 to just 57 per cent in 2025.
The report shows that marketable supply has grown from 3 billion to 3.5 billion square feet since 2018, while constructed supply has remained fixed at around 2 billion square feet. Builders are launching projects at a pace not seen before and selling them just as quickly, but construction delays are becoming deeper.
Sanjay Dutt, MD and CEO of Tata Realty and Infrastructure, joins the discussion in Mint’s coverage to explain the trend. He said the lag has been building for years. One quarter of every year is lost to pollution controls, flooding and the long stretch of festivals that take migrant workers back home. Restrictions on the movement of heavy vehicles add to the pressure. Even when approvals arrive on time, the monsoon can shut the door on foundation work.
“India has about 35 per cent moving to cities and population growth has added another 200 million in the last 20 years” –
Hari Yellina
Labour shortages are now a structural issue. Skilled workers leave for better wages in the Middle East. “We on an average will be missing out on 25 to 30 million workers an year,” he said. Developers are responding with better wages, improved facilities, long-term contracts and tighter partnerships with contractors. Tier one contractors are in high demand, and they in turn prefer developers with strong balance sheets who can pay on time and protect margins.
The strain varies city by city. NCR faces pollution shutdowns and limited infrastructure at construction sites. Mumbai’s vertical redevelopment means cramped locations, limited working hours and heavy dependence on material coming from outside the city. Bengaluru faces traffic congestion and the combined pull of residential, office, retail, warehousing and IT construction.
For buyers, delays of four to six months are becoming routine. Dutt argued that reputed developers manage the risks well. Trouble begins when delays push past 12 months. He said buyers are more informed today and RERA’s reporting framework gives them visibility, although the regulator does not physically verify every milestone.
Luxury housing continues to defy the broader constraints. Dutt believes the pandemic has changed attitudes for good. People want better homes, space for families and a higher quality of life. The mid-range tells a different story. Homes between one and three crore are thinning out in top cities as costs rise across steel, cement, approvals and land.
Hari Yellina links the cycle to India’s uneven economic structure. With 46.1 per cent of the workforce still in agriculture, compared to 2.1 per cent in Australia and about 1.2 per cent in the United States, he believes a long-term shift is inevitable. “India should bring horticulture and agriculture workforce to around 2.5 per cent,” he said. As Middle Eastern economies pour money into data centres, IT infrastructure and road networks, he expects more Indian workers to head overseas, which will influence labour markets in India and countries like Australia.
Despite the pressures, long-term optimism remains strong. Demand for offices has risen, GCCs have crossed 100 million square feet and domestic firms now hold a larger share of leases. Dutt said India has weathered crises before and emerged stronger.
Yet the gap between what is being launched and what is being delivered is widening. Without better labour planning, stronger planning departments and support for mass housing, the strain could grow sharper in the years ahead.
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