Kashmir Real Estate Plunges as Crisis Reshapes Valley’s Property Market

A Market in Freefall

Kashmir’s property market, once a symbol of aspiration and prosperity, now finds itself in uncharted territory. In recent months, the Valley’s real estate sector has tumbled into its deepest slump in years, with property values falling by as much as 30 percent and sellers slashing prices in a desperate bid to attract scarce buyers.

For more on regional real estate trends, visit Greater Kashmir Real Estate.

The Pahalgam Attack: A Knockout Blow

The catalyst for this downward spiral was the devastating terrorist attack in Pahalgam on April 22, which claimed 26 lives and delivered what industry experts describe as a “knockout blow” to an already fragile market. Properties that once fetched Rs 1 crore now struggle to draw offers of Rs 70 lakh, marking one of the steepest declines in the region’s history.

Sellers and Agents Struggle

“The market has taken a nosedive,” says Muhammad Shafi, a property consultant in Soura. “Properties that once sold within weeks are now languishing for months without a single inquiry. I have bought a house to dispose of it with a small margin, but now what I am encountering is 30 percent less value. This is one of the incidents, there are many such instances.”

Ripple Effects on Tourism and Economy

The ripple effect has been swift and severe. Tourism bookings have plunged by over 90 percent since the attack, triggering a cascading economic crisis that has hit real estate especially hard. For years, Kashmir’s property market was buoyed by tourism-driven investment and growing confidence in regional stability. Now, the sector faces its sharpest downturn in memory.

Explore the tourism impact at Business Today Tourism.

Stagnation and Buyer Resistance

Market analysts point out that property prices had already been stagnant for five years, with little appreciation even before the current crisis. The Pahalgam attack has only accelerated a worrying trend of declining buyer confidence and market stagnation.

Shift in Buyer Behavior

A dramatic shift in buyer behavior has emerged. Properties priced above Rs 1 crore are now facing “significant resistance,” while demand has surged for affordable homes and plots under the million-rupee mark. “There’s a noticeable shift,” says Mubashir Bhat, co-owner of Alpine Realtors. “Clients are now prioritising budget-friendly properties, and anything priced above Rs 1 crore is facing significant resistance.”

Two-Tier Market and Construction Freeze

This has created a two-tier market: smaller homes and plots are seeing unexpected demand, while luxury properties sit unsold for months. Meanwhile, the construction sector has ground to a halt, with developers putting major housing projects on indefinite pause. Several realtors have reported suspending significant developments due to market volatility and plummeting demand.

“We have had to pause two major projects. Launching new ventures in this climate is too risky. Our focus now is on sustaining existing operations and avoiding layoffs,” a leading developer revealed. The construction freeze is adding further economic pressure, threatening jobs and deepening the crisis.

At a Crossroads: The Road Ahead

Kashmir’s real estate sector now stands at a crossroads, battered by economic uncertainty and dramatically shifted buyer expectations. The transformation from a seller’s market to a buyer’s market has been swift and severe, leaving property owners with significant losses and developers rethinking their strategies.

While the path to recovery is uncertain, industry leaders remain hopeful that strategic interventions, improved security, and economic resilience can eventually restore the market’s former vitality. For now, Kashmir’s property market is navigating its most challenging chapter yet, with the entire Valley watching and waiting for signs of a turnaround.