Daijiworld Media Network - Panaji

Panaji, Oct 4: Developers in Goa are increasingly holding back new residential projects, particularly in the state capital, despite having land banks ready and continued demand for housing, as slower sales, rising unsold inventory and uncertainty over approvals weigh on the market.

The cautious approach marks a shift from the strong growth seen in Goa's real estate sector in the years following the Covid-19 pandemic. Developers and industry representatives said rising construction costs, weaker buyer appetite and regulatory uncertainty were prompting builders to wait rather than add fresh supply.

Mohidin Properties & Holdings CEO and CREDAI Goa secretary Avez Mohidin said construction costs had risen significantly, while property prices had not increased at the same pace.

“With the war situation, input cost has gone up by 30%. The construction industry depends on over 250 ancillary industries and these have fueled the cost escalation,” Mohidin said.

He said the increase in construction costs had made homes increasingly unaffordable for local buyers, prompting developers to increasingly focus on the second-home market.

Regulatory uncertainty has further contributed to the hesitation. Developers said policies can change frequently, while project approvals can take anywhere between eight months and two years, depending on the size of a project.

The uncertainty is particularly pronounced in Panaji, where the frozen Outline Development Plan (ODP) is under litigation. With the Assembly elections approaching, some developers are holding back projects until zoning and height-related policies are finalised and notified, said Manas Developers founder and CEO Tanmay Kholkar.

“There is hesitation in terms of when the project will start and we are telling the buyers to wait,” Kholkar said. He added that a clearer policy framework after the elections could allow developers to step up marketing and launch new projects.

Developers are also cautious about adding fresh supply when existing housing inventory remains unsold.

“Goa’s market has plateaued, but because land is limited and some demand is still there, there is a saving grace,” Mohidin said.

However, not all developers see the slower pace as a sign of weakness. Conscient Infrastructure CEO Rishi Raj described the situation as a phase of market maturity, with buyers becoming more selective.

“Every maturing market goes through a phase where buyers become more selective,” Raj said, adding that slower transactions could eventually allow quality projects to command a premium.

Susheela Homes and Properties managing director Nilesh Salkar was more optimistic about the sector, saying the real estate market was expected to show an upward trend, particularly as volatility in the stock market could encourage investment in property.

Salkar said developers with clear land titles would continue to launch projects, while identifying pending litigation under Section 39A as a key risk for the sector.

The combination of higher construction costs, affordability concerns, regulatory uncertainty and unsold inventory is therefore prompting developers to adopt a wait-and-watch approach, particularly in Panaji, even as industry players expect demand for well-positioned projects to remain.