Nuvama Report Highlights Gurugram's Affordability Struggle in India's Changing Housing Market
International brokerage Nuvama's latest study reveals Gurugram's growing affordability crisis, marking a shift from India's once uniform housing boom. The report shows how premiumization has changed Gurugram's market dynamics, while other cities show different trends.
Market Fragmentation: End of Uniform Growth
Nuvama confirms the housing cycle's sameness from FY21-FY24 has ended, leading to unique regional stories:
- Gurugram faces severe affordability issues with 51% of H1CY25 launches over ₹50 million
- Hyderabad shows signs of peaking after its FY17-FY25 rise
- Bengaluru and Chennai keep growing naturally through job creation and balanced pricing
- Mumbai Metropolitan Region is in the middle of its cycle with a steady 10-month inventory
"Sales volumes dropped for 12 months from June 2024 to May 2025 before a recent rebound," the report notes, highlighting Gurugram's risky situation despite a 68% year-over-year volume increase in June 2025.
Gurugram's Premiumization Dilemma
The satellite city of the National Capital Region faces special challenges:
- Only 12% of new launches are priced below ₹30 million compared to the 35% industry average
- Dominance in the ₹50-100 million segment, where Gurugram outsold all other major cities combined
- 40% YoY price increase, widening the affordability gap
Analysts see developers focusing on luxury projects despite weak buyer sentiment. "With price hikes likely to slow, investor-led demand may drop," warns Nuvama, noting Gurugram's risk from interest rate changes.
Regional Contrasts: Winners and Stagnant Markets
Hyderabad's Plateau Inventory backlog reaches 26 months as price growth stops. The brokerage confirms Hyderabad "has likely passed its peak" after seven years of growth, with sales value growth not matching the previous speed.
Southern Resilience Bengaluru's property prices are increasing by 14% annually, largely due to the growth of the IT sector., while Chennai's 21% rise benefits from relative affordability. Both markets keep balanced premium-mid income project mixes.
Western Challenges Pune shows "growth fatigue" despite 13-month inventory health, while MMR's modest 8-10% price appreciation reflects cautious developer strategies.
Investment Outlook and Strategic Shifts
Nuvama maintains Buy ratings for:
- Prestige Estates (₹2,009 target; 21% upside)
- Brigade Enterprises (₹1,437 target; 51% upside)
Yet the brokerage warns real estate stocks may stay range-bound due to:
- Tariff-related hiring slowdowns affecting end-user demand
- Valuation concerns capping upside potential
- Persistent weak volume growth in premium segments
"Falling mortgage rates offer protection but can't offset fundamental affordability issues," states the report. Developers need to shift toward mid-income segments to boost volume growth, especially in Gurugram, where the housing cycle's width has shrunk significantly.