"The trend appears set to last well into fiscal 2019 or beyond, portending more pain for developers," it said. Crisil said high property prices have turned end-users into fence-sitters in most micro markets.
Also, concerns over job losses and lack of employment opportunities is curtailing income visibility required for a housing loan, which is typically for a long tenure, keeping away buyers.
According to the agency, rentals are being preferred to buying a property and many nuclear families are opting for rental accommodation in suburban locations than purchasing a house in a peripheral micro market.
"There are risks associated with delivery of under-construction projects, especially delays in getting possession from the developers, which deter buyers," it said.
The agency further said participation of the investor community has reduced significantly on account of falling returns on the asset.
Crisil Research senior director Prasad Koparkar, however, said the next few quarters will see more launches in the affordable housing category, or projects with smaller configurations, leading to a reduction in the overall ticket size.
"That, along with falling interest rates and supportive credit-linked subsidy framework, will benefit end-users because affordability improves. We are also seeing prices hovering at current levels on account of weak demand and moderation in new supplies," he added.