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Home Sales and New Launches Decline as High Prices and Global Uncertainty Weigh on Buyers

Residential real estate activity across India s leading housing markets slowed during the January March quarter of 2025, with both home sales and fresh project launches registering notable declines. Rising property prices, affordability concerns, and increasing geopolitical uncertainty prompted buyers and developers alike to adopt a cautious stance. Across eight major residential markets, housing sales fell by 19% year-on-year in the first quarter. New project launches also declined by 10% annually , reflecting developers restrained outlook after sharp price appreciation over the past two years pushed homeownership beyond the reach of many buyers. Price Surge and Global Risks Trigger Buyer Caution The sustained rise in property values has already begun impacting demand, particularly among end-users who depend on home loans. Adding to this pressure, global trade tensions and economic uncertainty have further dampened investor sentiment, encouraging prospective buyers to delay large financial commitments such as property purchases. Market observers note that the decline in sales could have been more severe if not for the 25-basis-point reduction in the policy rate announced by the Reserve Bank of India (RBI) in February 2025 . Lower borrowing costs helped cushion the slowdown by improving loan affordability and supporting buyer confidence. City-wise Sales Performance: Mixed Trends During Q1 2025, fewer than 1 lakh residential units were sold across the tracked cities. Most markets recorded a decline, though Bengaluru and Chennai stood out by registering annual growth. Cities such as Hyderabad , Mumbai Metropolitan Region , and Pune experienced the sharpest year-on-year drop in home sales. Residential Sales Snapshot (Units Sold) City Q1 2025 Q1 2024 YoY Change Ahmedabad 10,730 12,915 -17% Bengaluru 11,731 10,381 +13% Chennai 4,774 4,427 +8% Delhi NCR 8,477 10,058 -16% Hyderabad 10,647 14,298 -26% Kolkata 3,803 3,857 -1% Mumbai (MMR) 30,705 41,594 -26% Pune 17,228 23,112 -25% Total 98,095 1,20,642 -19% New Housing Supply Also Contracts Signs of a market correction were equally visible on the supply side. Five of the eight cities reported a year-on-year decline in new launches as developers recalibrated project pipelines. The steepest drop in supply was seen in Pune, Hyderabad, and Ahmedabad , while Bengaluru and Kolkata recorded strong annual growth in new project additions, driven by sustained local demand and developer confidence. New Residential Launches Snapshot (Units Launched) City Q1 2025 Q1 2024 YoY Change Ahmedabad 2,384 3,116 -23% Bengaluru 18,183 10,000 +82% Chennai 4,070 4,723 -14% Delhi NCR 7,952 6,872 +16% Hyderabad 10,156 15,095 -33% Kolkata 3,534 1,485 +138% Mumbai (MMR) 31,322 36,784 -15% Pune 15,543 24,945 -38% Total 93,144 1,03,020 -10% Outlook: Market Consolidation Phase Ahead With housing affordability under pressure and global economic signals remaining uncertain, India s residential real estate market appears to be entering a phase of consolidation. While interest rate relief has provided some support, sustained recovery will depend on price stabilisation, income growth, and broader economic clarity. Developers are likely to focus on selective launches, while buyers may continue to adopt a wait-and-watch approach in the coming quarters.