Cement GST Cut, Stable Rates, and Festive Demand to Boost Housing Market in Q4 2025
India’s residential real estate sector demonstrated resilience and stability in Q3 2025, even as transaction volumes softened slightly, according to the latest Real Insight Residential Report (July–September 2025) by PropTiger.com, part of Aurum PropTech. The quarter saw a 9.1% quarter-on-quarter rise in new housing supply, reaching 91,807 units, while home sales remained broadly stable at 95,547 units, down just 2.2% QoQ and 1% YoY.
Despite a moderation in sales volumes, the total transaction value surged 14% year-on-year to ₹1.52 lakh crore, underscoring a clear shift toward premium and high-value housing. This trend, as highlighted in the report, reflects a maturing market where buyers are prioritizing quality and long-term appreciation potential over entry-level affordability.
“The Indian housing market continues to stand on a strong macroeconomic foundation,” the report noted, citing stable inflation, robust private consumption, and steady construction activity. “The fiscal deficit is narrowing, borrowing costs remain predictable, and policy reforms like the GST reduction on construction materials are expected to ease input cost pressures.”
India’s economy has emerged as a pillar of stability in a volatile global environment. GDP growth is projected at 6.5–6.7% for FY26, with CPI inflation averaging just 2.4%, the lowest in six years. The RBI’s repo rate has remained stable at 5.5%, providing a predictable borrowing environment and bolstering homebuyer confidence.
Two major policy developments strengthened market sentiment in Q3: The GST Council’s decision to cut tax on cement (from 28% to 18%) and other key materials like marble and granite (from 12% to 5%), which is expected to reduce construction costs and enhance affordability. The proposed Registration Bill 2025, aimed at digitizing property registration and record-keeping, which promises greater transparency and reduced litigation.
The report revealed divergent regional trends, with southern cities continuing to outperform. Hyderabad led in sales with 17,658 units sold, up 53% YoY, driven by robust IT-sector employment and infrastructure growth. Bengaluru followed with 13,124 units sold, supported by strong end-user demand. Pune and Chennai saw strong new launch activity, rising 26% and 25% QoQ, respectively.
Meanwhile, Delhi-NCR and MMR (Mumbai Metropolitan Region)—though commanding high-value transactions—saw lower volumes due to elevated prices and a skew toward luxury projects. Kolkata emerged as a surprise performer, with new launches up 129% YoY, indicating renewed developer confidence.
Property prices continued their upward trajectory across all major cities. Delhi-NCR led the pack with a 19% YoY rise, followed by Bengaluru (+15%), Hyderabad (+13%), and Chennai (+9%). This broad-based appreciation reflects sustained end-user demand and limited ready-to-move-in supply.
Unsold inventory across the top eight cities rose marginally by 4% YoY to 5.06 lakh units, with the quarters-to-sell (QTS) ratio stable at 5.8 quarters, or roughly 17 months — within the healthy 18–24 month range. However, the report flagged a 47% rise in unsold stock within the ₹2–5 crore bracket, highlighting a need to monitor luxury absorption rates in the coming quarters.
Looking ahead, PropTiger expects Q4 2025 to be shaped by festive season demand, stable financing conditions, and the impact of recent policy reforms. The report anticipates strong activity during Dussehra to year-end, supported by attractive developer schemes and continued FPI inflows.
