On the face of it , the decline in growth in residential sales is due to the price rise in properties. But there is more to it than what meets the eye.
According to sector experts, realtors push for larger-sized properties along with the increase in prices is making them unaffordable for many buyers.
According to Mayank Saksena, chief executive officer-land services at Anarock Property Consultants , developers are not making as many one and 2BHK (bedroom-hall) apartments in cities such as Bangalore as they used to make earlier. “Mostly they are focusing 3 and 4 bedroom apartments,” he said.
Saksena is right . While the share of 1BHK units to overall residential sales has declined from 9% in June 2022 to 6.7% in June 2025 in Bangalore, for 2 BHKs it has declined to 27.2% from 40% in the same period in the city.
The share of 3BHKs, on the other hand, has gone up from 45.3% to 52.7% in the city during this period, according to TruBoard Partners.
In Gurugram, the share of 1BHK apartments in sales has remained less than1% in the last three years while for 2 BHKs, it has come down to 7.7% from 23.7% during this period. However, even the share of 3BHKs has seen fallen to 46.3% from 53.9%, indicating developers are focusing on even larger size flats.
For Mumbai, 1BHKs accounted for 28.3% of sales in June 2025 from 34.6% in June 2022. The share of 2 BHKs in the region stands at 42.3% compared to 43.6%. For 3BHKs, it has gone up to 21% from 18.7% three years ago , TruBoard data show.
Anarock’s Saksena said 3BHK apartments in Bangalore now have a average size of 2,200 sq ft compared to 1,200 sq ft for a 2BHK. According to him, prices have shot up by three times in the last five years to an average of `15,000/sq ft and apartment sizes have almost doubled.
“So increase in prices and sizes have made it unaffordable for many. It is not only for Bangalore, other cities also have seen this phenomenon,” he said .
Vivek Rathi, National Director – Research, Knight Frank India agrees with Saksena.
“Since ticket prices have gone up , affordability has gone out of the window for many people. There is no choice for them than to buy property in far off suburbs,” he said.
According to him , property prices have risen by 20-60% in most of the cities since 2020. He said big developers have moved away from affordable housing due to economics involved with it and players catering to this segment have done badly.
The average residential prices across top cities rose 11% y-o-y in June quarter with Delhi-NCR leading the pack with a 27% rise, followed by Bengaluru (12%), according to Anarock Research.
A head of Mumbai based NBFC said sales have been hit across all segments, whether its affordable or luxury, by 15-20%.
“In markets such as NCR, investors are almost out as prices are not rising anymore,” he said.
On top of increased prices and larger sizes, loading , the difference between super built up and carpet area, has also risen as a result of which homebuyers are paying more for common areas and are getting less liveable space in residential properties.
Average loading in leading regions like Mumbai Metropolitan Region (MMR), Delhi NCR and Bengaluru has crossed 40% from around 30% in 2019, according to a recent report by Anarock.
Following the subdued sales, developers are now launching smaller 3BHK & 4 BHK apartments in cities such as NCR and Mumbai.
“Early indicators show a growing preference for smaller, well-connected units, and price increases that outpace income growth have further restrained market momentum,” said Sangram Baviskar, founding member & CEO (real estate), TruBoard Partners.
Baviskar said the industry’s focus on larger, premium apartments has widened the gap between new supply and buyer demand.
Amit Bagri, chief executive officer at Kotak Mahindra Investments said the buyers today do not have a feeling of FOMO (fear of missing out) and have lot of options in cities such as Mumbai and Bangalore.
“They feel prices are not going to go up in a hurry. They say let’s wait for six months” he said.
Other experts pointed out buyers are informed and making smart choices with decline in affordability.
For Tata Realty & Infrastructure, sales were down due to lower launches on account of legal issues regarding environment permissions, some micro markets peaking with regards to prices and exhausting client base .
Its MD & CEO Sanjay Dutt said sales were down in previous quarters due to wait and watch by buyers in the backdrop of global geopolitical situation and fear of recession in global markets due to tariff war.