Indian Housing Market Slows in Q1 2025 Amid Soaring Prices and Global Uncertainties
The Indian residential real estate market, which had been on a record-breaking bull run, witnessed a significant slowdown in the first quarter of 2025. According to data from real estate consultancy firm Anarock, soaring property prices and global economic uncertainties have dented buyer sentiment, leading to a sharp 28% decline in home sales across the country’s top seven cities compared to the same period last year.
Steep Decline in Home Sales
The first three months of 2025 saw only 93,280 homes sold in major metropolitan markets—a stark drop from the all-time high of 1.30 lakh units sold in Q1 2024. The slowdown was widespread, with all major cities reporting double-digit declines in transactions.
▪️Mumbai Metropolitan Region (MMR), despite being the top-performing market, saw sales dip 26% (31,610 units vs. 42,920 units in Q1 2024).
▪️Hyderabad suffered the steepest fall, with sales plunging 49% (10,100 units vs. 19,660 units).
▪️Bengaluru, often considered India’s most resilient real estate market, saw a relatively moderate 16% decline (15,000 units vs. 17,790 units).
▪️Delhi-NCR, Pune, Chennai, and Kolkata also recorded significant drops of 20%, 30%, 26%, and 31%, respectively.
Luxury Push Drives Price Surge
One of the key reasons behind the sales slowdown was the sharp rise in property prices over the past year. Average residential prices across the top seven cities surged between 10% to 34%, with the National Capital Region (NCR) and Bengaluru leading the hike at 34% and 20%, respectively.
Anuj Puri, Chairman of Anarock Group, attributed this to "steep new supply additions in the luxury and ultra-luxury segments, coupled with sustained demand in premium housing." However, the price surge has made homes less affordable for mid-segment buyers, contributing to the sales slump.
New Launches Dip, But Bengaluru Bucks the Trend
While new housing supply remained above the 1 lakh mark, it still saw a 0% year-on-year decabline Interestingly, Bengaluru defied the trend with a 27% increase in new launches, whereas Hyderabad saw a massive 55% drop in fresh supply.
- MMR and Bengaluru together accounted for 52% of all new launches in Q1 2025.
- NCR, Bengaluru, and Kolkata were the only cities to see an increase in supply, while others reported declines.
Unsold Inventory Rises, Signaling Caution
The total unsold inventory across the top seven cities stood at 5.60 lakh units by the end of Q1 2025. Bengaluru, despite strong new launches, saw its unsold stock rise by 28% to 58,660 units, indicating a potential oversupply in certain segments.
Outlook: Will the Market Recover?
The combination of high prices, geopolitical tensions, and global economic instability has clearly impacted buyer confidence. While the luxury segment continues to perform well, the broader market is feeling the pinch.
Experts suggest that if prices stabilize and interest rates remain favorable, demand could pick up in the latter half of 2025. However, for now, developers may need to reassess pricing strategies to attract mid-income buyers and reignite growth in the residential sector.
(Source: Anarock Research, Q1 2025 Real Estate Report)
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