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Home Sales and New Launches Decline as Rising Prices Impact Buyer Sentiment

Home Sales Drop in Early 2025 Due to Rising Prices and Economic Concerns Home sales across eight major residential markets in India recorded a noticeable decline during the January March quarter of 2025. The drop in demand is largely attributed to rising property prices and global economic uncertainty, which have prompted potential buyers to delay purchase decisions. A recent real estate market analysis shows that home sales fell by 19% year-on-year , indicating that affordability pressures and cautious investment behaviour are affecting the housing sector. At the same time, new residential project launches decreased by around 10% compared to the same period last year. Developers appear to be moderating supply after significant property price increases over the past few years made homes less affordable for many buyers. Industry experts suggest that the sharp rise in property prices had already begun slowing demand. Ongoing global economic tensions and uncertainty in international markets have further contributed to cautious buyer sentiment, particularly for large financial commitments like real estate. However, the decline in housing demand could have been steeper if not for the 25 basis-point repo rate reduction by the Reserve Bank of India (RBI) in February 2025 . Lower borrowing costs tend to support buyer confidence because many urban homebuyers rely on housing loans to finance property purchases. Since the repo rate acts as the benchmark for lending rates, any reduction can lead to cheaper home loans and potentially encourage real estate investments. City-wise Housing Sales Performance During the first quarter of 2025, fewer than 100,000 residential units were sold across the eight key housing markets tracked in the report. Most cities recorded a drop in demand, although Bengaluru and Chennai were exceptions , showing positive sales growth compared to the previous year. Cities such as Hyderabad, the Mumbai Metropolitan Region (MMR), and Pune experienced the steepest decline in sales , reflecting the impact of higher prices and cautious buyers. Residential Sales (Units) City Q1 2025 Q4 2024 Q1 2024 QoQ YoY Ahmedabad 10,730 10,170 12,915 6% -17% Bengaluru 11,731 13,236 10,381 -11% 13% Chennai 4,774 4,073 4,427 17% 8% Delhi NCR 8,477 9,808 10,058 -14% -16% Hyderabad 10,647 13,179 14,298 -19% -26% Kolkata 3,803 3,715 3,857 2% -1% Mumbai 30,705 33,617 41,594 -9% -26% Pune 17,228 18,240 23,112 -6% -25% Total 98,095 1,06,038 1,20,642 -7% -19% Decline in New Housing Supply The slowdown in demand is also reflected in the reduction of new project launches . Out of the eight major housing markets analysed, five cities reported an annual drop in new supply . Cities such as Pune, Hyderabad, and Ahmedabad recorded the most significant declines in fresh housing launches during the quarter. However, some markets still saw growth in new supply, with Bengaluru and Kolkata witnessing a strong rise in new project launches compared to the previous year. New Residential Launches (Units) City Q1 2025 Q4 2024 Q1 2024 QoQ YoY Ahmedabad 2,384 3,515 3,116 -32% -23% Bengaluru 18,183 15,157 10,000 20% 82% Chennai 4,070 4,005 4,723 2% -14% Delhi NCR 7,952 10,048 6,872 -21% 16% Hyderabad 10,156 9,066 15,095 12% -33% Kolkata 3,534 3,091 1,485 14% 138% Mumbai 31,322 30,127 36,784 4% -15% Pune 15,543 13,652 24,945 14% -38% Total 93,144 88,661 1,03,020 5% -10% Markets Covered in the Analysis The report examines housing market trends across eight major urban regions in India, including: Ahmedabad Bengaluru Chennai Hyderabad Kolkata Delhi NCR (Gurugram, Noida, Greater Noida, Ghaziabad, Faridabad) Mumbai Metropolitan Region (Mumbai, Navi Mumbai, Thane) Pune