Prices in most markets have held steady despite lending and shadow banking crises.
The country's real estate market is likely to see a significant price correction for the first time in a decade as the coronavirus pandemic stalls businesses across the country, according to a half-dozen industry insiders.
"Property prices may come down by 10-20 per cent across geographies, while land prices could see an even higher reduction of 30 per cent," said Pankaj Kapoor, chief executive of real estate consultancy firm Liases Foras, adding there hasn't been such a correction since the global financial crisis.
Since then, prices in most markets have held steady despite lending and shadow banking crises.
In the last year, things had taken a turn for worse because of a liquidity crunch at shadow banks - which are big lenders to both developers and property buyers - forcing companies to offer discounts.
Now buyers can expect far steeper cuts.
"It is a complete buyer's market. So if somebody really wants to do the deal, they have to reduce prices," said Ram Raheja of S Raheja Realty in Mumbai.
The situation now is so severe that there is four to five years' worth of real estate inventory across India - an all-time high. The country's nine major residential markets have unsold units worth some Rs 6 lakh crore, according to a report in January by PropTiger, an online real-estate portal.
Banks are also worried that if developers can't liquidate their stocks, it could lead to defaults and add to a $140 billion pile of bad loans.
In the last few quarters, even though the government has come up with steps to resolve the stress in the real estate market, several projects are still stuck, lacking funds or buyers.
The situation looks set to worsen as coronavirus cases spread in India despite a three-week lockdown. So far the disease has infected nearly 2,000 people and killed more than 50.
"The profits of most developers have already taken a beating, and there is no profit as such left in the system. Everyone is just trying to survive by maintaining their cash flows," said Ashok Mohanani, vice president of the real estate industry body NAREDCO in Maharashtra.
The impact will be felt across residential and commercial properties, Ashok Mohanani said, adding, "the question is of the survival of the fittest."