In the first quarter of 2025, Indian real estate experienced a significant downturn in the housing market, with sales dropping by 23% and new supply plummeting by 34% compared to the same period in the previous year. This decline is attributed to rising property prices and geopolitical uncertainties impacting buyer sentiment.
City-Specific Performance:
Bengaluru: Contrary to the overall trend, Bengaluru saw a 10% increase in housing sales, totalling 18,508 units in Q1 2025. The city also led in new launches, with a 17% rise to 20,227 units, accounting for 25% of all new supply during this period.
Delhi-NCR: The region reported a 10% uptick in sales, reaching 11,221 units. However, new supply decreased by 14% to 6,064 units.
Hyderabad: The city faced the steepest declines, with sales dropping 47% and new supply falling 38%.
Mumbai: Sales decreased by 36%, and new supply was halved, marking a 50% reduction.
Pune: The city experienced a 33% decline in sales and a 48% reduction in new supply.
Market Analysis:
The housing market is undergoing a correction after three years (2021-2023) of record supply. The rise in home prices and caution among investors, due to geopolitical developments and certain weaknesses in the Indian economy, have contributed to the drop in sales. However, the market has displayed strong demand, evident from the healthy absorption-to-supply ratio, which stood at 131% in Q1 2025.
Outlook:
Despite the current downturn, the robust absorption-to-supply ratio suggests underlying demand remains strong. Indian real estate experts anticipate that as geopolitical tensions ease and economic conditions stabilize, both housing sales and new supply are likely to recover in the forthcoming quarters.
