India’s urban housing market showed clear signs of consolidation in the final quarter of 2025, as home sales across the country’s nine largest cities declined to their lowest level in over four years. Fewer than 1 lakh homes were sold between October and December, marking a sharp year-on-year fall and signalling a shift in buyer behaviour rather than a collapse in demand.
Market analysts attribute the slowdown primarily to changing preferences and rising ticket sizes. While volumes weakened, the overall value of homes sold remained resilient, pointing to sustained interest in larger and premium homes. An industry expert noted that the traditional festive-season boost failed to materialise, reflecting affordability pressures for mid-income buyers and a growing tilt towards higher-priced housing. The decline was widespread, with most major cities reporting double-digit drops in quarterly sales. Only two markets bucked the trend, supported by local infrastructure upgrades and improved connectivity. In contrast, several established metros saw sales contract by as much as a third, highlighting the uneven nature of urban housing demand in the current cycle. This divergence has been building over the past two years. Data from recent launches show that developers are increasingly prioritising premium and luxury projects, even as the total number of homes introduced to the market has reduced. Fewer units are being launched, but at higher average prices, reflecting rising land costs, construction expenses and compliance requirements. As a result, value growth has outpaced volume growth, fundamentally altering the structure of urban housing supply.
Supply levels mirrored the demand slowdown in the final quarter. New residential additions fell on both annual and quarterly bases, with only a handful of cities recording growth in fresh launches. Developers appear cautious, focusing on clearing existing inventory and maintaining price stability rather than expanding aggressively. Urban planners suggest this restraint could prevent future oversupply, particularly in cities already grappling with infrastructure stress. The broader implications extend beyond real estate. Slower housing absorption can affect employment across construction and allied sectors, while reduced supply of affordable homes risks pushing middle-income households further to city fringes. Experts argue that this trend underscores the need for policy support aimed at balanced urban growth, including faster approvals, transit-oriented development and incentives for energy-efficient, mid-income housing.
Looking ahead, the housing market’s trajectory will depend on income growth, borrowing costs and the ability of cities to deliver well-connected, liveable neighbourhoods. While premiumisation may support developer balance sheets in the short term, sustaining healthy urban housing markets will require a renewed focus on inclusivity, affordability and sustainable city planning.
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