Panaji: Developers are pulling back from launching new residential projects, particularly in the state capital, even as land banks remain ready and demand has not entirely dried up. The reluctance marks a shift in a market that surged in the years after the Covid-19 pandemic, with slower sales, rising unsold inventory and uncertainty over approvals prompting builders to wait rather than add fresh supply.Industry players said the slowdown was being driven by a combination of rising construction costs, weaker buyer appetite and regulatory uncertainty. Prices have climbed sharply since the pandemic, but have not kept pace with the increase in construction expenses, making homes increasingly unaffordable for local buyers.“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,” said Mohidin Properties & Holdings CEO and CREDAI Goa secretary Avez Mohidin.He said unaffordability had worsened for local buyers, while developers were increasingly looking towards the second-home market.Regulatory uncertainty is adding 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 the project.The uncertainty is particularly pronounced in Panaji, where the frozen outline development plan (ODP) is under litigation. With assembly elections approaching, some developers are also 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 project launches.Developers are also wary of adding supply to a market where existing 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 view the slower pace as a sign of weakness. Conscient Infrastructure CEO Rishi Raj described it 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 result in quality projects commanding a premium.Susheela Homes and Properties managing director Nilesh Salkar was more upbeat. “Real estate market is expected to show an upward trend, especially as the stock market is volatile,” he said, adding that developers with clear land titles would continue to launch projects. He flagged pending Section 39A litigation as a key risk.
