Housing sales slide 14% as affordability pressures mount across cities: Report

India Today

16-07-2025

India's residential housing market witnessed a sharp year-on-year dip in sales during the April–June quarter of 2025, as affordability concerns and cautious sentiment prompted many prospective buyers to hold back. According to the latest 'Real Insight Residential' report by PropTiger.com, home sales across the top eight urban markets fell 14% compared to the same period last year.The PropTiger report, which tracks sales and launches across major cities, found that the biggest annual drop was recorded in Mumbai Metropolitan Region (MMR) and Pune, where sales fell by 32% and 27% respectively. Ahmedabad, Delhi NCR, and Hyderabad also reported declines, while Bengaluru, Chennai, and Kolkata were the only cities to see growth in year-on-year sales.advertisementSequentially, the overall sales numbers remained flat, with the eight cities collectively selling 97,674 units in Q2 2025 compared to 98,095 units in Q1. However, a closer look shows that MMR (27%), Pune (16%), and Bengaluru (16%) were responsible for the bulk of activity, accounting for nearly 60% of all quarterly sales.AFFORDABILITY WOES
Sridhar Srinivasan, Head of Sales at PropTiger.com, described the slowdown as a 'recalibration, not a retreat.' He pointed to affordability pressures in the budget and mid-income segments as the main reason for hesitation among buyers.'The short-term dip in home sales and new launches is more of a recalibration than a sign of waning demand. Affordability pressures, particularly in the budget and mid-income segments, have led to some cautious buyer sentiment. However, underlying demand remains intact, as evidenced by strong sequential growth in several cities and the continued dominance of key markets like MMR, Pune, and Bengaluru,' Srinivasan said.Despite the slowdown, he noted developers are showing intent to stay invested, especially in premium offerings. Strategic land acquisitions in the first half of 2025 indicate long-term confidence in the market, backed by sound macroeconomic fundamentals.Alongside the dip in sales, the report highlights a 17% decline in new housing launches compared to Q2 2024. Launches also fell 10% on a sequential basis, with developers holding back amid softer demand and broader geopolitical tensions.Notably, new launches in MMR, Pune, and Bengaluru dropped sharply quarter-on-quarter, while cities like Chennai and Delhi NCR saw a significant uptick. Chennai posted an 87% sequential rise in launches, and Delhi NCR grew 31%. In contrast, Bengaluru witnessed a 32% fall in new supply during the same period.Geopolitical developments also played a role. The report notes that a brief but intense escalation in border conflict between India and Pakistan during the quarter added a layer of uncertainty that may have dampened market activity temporarily.PropTiger's report highlights that this dip is not necessarily due to a weakening in housing demand but is largely a function of affordability stress caused by relentless price increases.'Supported by sectoral performance and improving consumption trends, macroeconomic indicators point to India's resilience in a turbulent global environment. So, this is not a demand-specific issue per se. The dip in both sales and launches have to do with the fact that housing affordability has worsened after a prolonged period of dramatic growth in average costs, severely affecting the affordable housing segment,' the company said.advertisementWith affordability stretched and developers becoming more selective about launching new projects, the coming months could be a period of consolidation for India's housing market. However, the underlying fundamentals remain strong—population growth, urbanisation, and aspirational demand continue to provide a solid foundation.Whether the market sees a bounce-back in the next quarter will depend on how pricing trends evolve and whether developers pivot toward more affordable offerings. For now, the data points to a pause in the momentum that defined much of the past two years.- EndsMust Watch