India’s residential property market across its largest cities saw a notable slowdown in 2025, with housing sales declining even as overall transaction values continued to rise. The divergence reflects a market adjusting to higher prices, economic uncertainty and shifting buyer preferences, according to recent industry analysis.
Across the country’s seven biggest urban housing markets, home sales fell to just under four lakh units in 2025, marking a double-digit decline from the previous year. Property consultants attribute the drop to a combination of rising home prices, cautious sentiment among white-collar buyers following job losses in the technology sector, and broader global uncertainties that have tempered large financial commitments. Despite the fall in volumes, the total value of homes sold increased year-on-year, crossing the ₹6 lakh crore mark. Analysts said this indicates that while fewer homes changed hands, buyers who remained active gravitated towards higher-priced properties, pushing up average transaction values. The Mumbai Metropolitan Region and Pune continued to dominate residential sales, together accounting for nearly half of all units sold across the top cities. However, both western markets also recorded some of the steepest annual declines in volumes. Industry experts noted that sustained price appreciation in these regions has begun to test affordability, particularly for mid-income households. Southern markets delivered a mixed performance. Bengaluru saw only a marginal dip in sales, underlining the city’s relatively resilient demand base driven by its diverse employment ecosystem. Hyderabad, by contrast, experienced one of the sharpest slowdowns, reflecting a combination of rapid price escalation in previous years and cautious buyer sentiment. Chennai stood out as the only major city to register growth in housing sales, supported by steady local demand and comparatively moderate price increases.
On the supply side, new housing launches edged up slightly during the year, led by Mumbai and Bengaluru. Developers, however, were increasingly selective, focusing on premium projects in well-connected locations. Over a fifth of the new supply launched in 2025 was priced above Rs 2.5 crore, highlighting the sector’s continued tilt towards luxury and upper-mid segments. A senior industry observer said that developers are prioritising margins and balance-sheet strength over aggressive expansion. “Volumes have stabilised, but value growth remains intact because supply is increasingly skewed towards higher-ticket homes,” the expert noted. Price growth also moderated across most cities. Average residential prices rose at single-digit rates in 2025, a sharp contrast to the double-digit jumps seen a year earlier. The national capital region was the sole outlier, recording significantly higher price appreciation due to a surge in premium housing supply. Unsold inventory in the top cities increased modestly by year-end, signalling a more balanced market. Analysts believe this pause offers an opportunity for more thoughtful urban housing development—one that aligns supply with real demand, improves resource efficiency and supports long-term city resilience.
Looking ahead, market sentiment for 2026 will hinge on interest rate movements and developers’ pricing discipline. Lower borrowing costs could revive end-user demand, particularly in compact, well-planned urban projects that balance affordability with sustainability.
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