End-User Homebuyers Regain Control in the Indian Real Estate Market
Recent real estate reports suggest a slowdown in housing sales, but the data reveals that the market is correcting itself. End-users, not investors, are now the primary buyers, making it a favorable time for genuine homebuyers.
Real EstateHousing MarketEndusersAffordabilityHomebuyersReal Estate NewsJul 03, 2025
Let’s take a closer look at the data and market dynamics behind these headlines to see if these fears are justified or misplaced for genuine end-users.
What the Headlines Say
A recent report by one real estate consultancy states that there has been a 20% drop in housing sales across the country’s top seven metropolitan cities in Q2 2025 when compared to the same period last year. The Mumbai Metropolitan Region (MMR) saw a 25% decline. Another real estate agency estimates a 23% annual sales decline in Q1 2025 across nine major cities, attributing this drop to high prices and concerns about India’s economic growth. Yet another agency found a 19% year-on-year decline in housing sales in Q1 2025, with a 10% decline in new launches. The consensus seems to be that premium and luxury housing has been most affected, with unsold stock in these segments potentially increasing further.
While most of these agencies don’t explicitly say so, the impression these figures seem to signal is that the Indian housing market is entering a downturn phase. Some even suggest that aspiring homebuyers should hold off on purchases for now.
What the Data Really Means
1. This is a correction, not a crash
- We should remember that the recent slowdown follows three years of record-breaking sales and supply infusions after the Covid-19 pandemic. These levels were not sustainable, and everyone knew it.
- The current decline is a typical market correction that always follows a massive boom. It is not a sign of systemic weakness.
2. Investors are withdrawing, not end-users
- A major part of the current drop in sales is in the premium and luxury segments, which are heavily investor-driven. Speculative buying has caused prices to soar in these segments and in some areas.
- One of the real estate consultancies clearly mentions that investors now make up less than 10% of housing buyers, and the market is primarily served by end-users – people who buy homes to live in them, not to rent out or flip for quick profits.
- The pain that these experts infer is clearly in the premium and luxury segments, while it is the affordable and mid-segment housing segments that most Indian end-users focus on. In these segments, there is less supply now because most big developers started focusing on the higher-margin categories – but demand and, therefore, sales in them remain robust.
3. End-users now enjoy much better affordability
- Home loan interest rates are on the decline – the RBI has cut the repo rate by 100 basis points this year, making EMIs much more manageable.
- There are still Government schemes such as PMAY and various state-level incentives for first-time and affordable housing buyers in any part of the country.
- In most major cities, the affordability of housing has improved to its best levels since the Covid-19 pandemic.
For example, Pune and Pimpri-Chinchwad (PCMC) housing affordability has improved significantly with Pune’s affordability ratio now at 22% – making it the 2nd-most affordable major Indian city after Ahmedabad. PCMC has seen an 80% rise in housing sales and a 155% increase in property values since 2020, and it remains very affordable. In Ahmedabad, homebuyers now have to spend only 18% of their annual household income on EMIs, which is very much under the 40% affordability threshold. Even Mumbai, notoriously the least affordable city of India, has seen its affordability ratio drop below 50% for the very first time.
Why Genuine Homebuyers Should Ignore the Headlines
1. End-users buy homes to live in them, not to turn profits
- Most homebuyers in India buy homes to live in them, not as speculative assets. The security, stability, and long-term wealth creation potential of ownership housing remain intact, regardless of short-term sales trends.
- End-users are not concerned with the volatility that upsets investors, who are far more concerned about price cycles and liquidity issues.
2. End-users benefit from the current market conditions
- Many builders are now offering attractive deals, including discounts, flexible payment plans, and various add-ons, to attract end-users.
- Rental values are rising constantly in most major Indian cities, often making owning a home a lot more financially viable than continuing to live in rented homes – especially given the current interest rates and tax benefits.
3. India’s long-term fundamentals remain strong
- Our GDP growth is still very robust, and household incomes are going up. This strongly supports long-term housing demand.
- The real estate sector is growing at a CAGR of over 24%, and housing remains, by far, the most incentivized asset class in India. No other asset class offers comparable tax breaks and other financial benefits.
- Homeownership remains the most aspirational goal for most Indians, and India’s rapid urbanization, the constant increase in nuclear families, and ever-rising migration into our cities will always guarantee steady end-user demand for housing.
Buying a Home Makes More Sense Than Ever
No doubt, the market slowdown that these consultancies and experts report is real. But its implications need to be understood better. We are looking at data which shows that speculative activity, especially in the luxury segments, is cooling off after an unsustainable boom. This is not a collapse in end-user demand, or a crisis in the system. For genuine homebuyers, the fundamentals remain as strong as ever. In fact, end-users are now firmly in control of the housing market and face far less competition from investors. They have more bargaining power than ever before. For those who are looking to buy a home to live in, the current market environment is, in many ways, more favorable than ever. Let the headlines spook investors – for end-users, this is the right time to make the most important investment of their lifetimes.
Frequently Asked Questions
What is causing the slowdown in housing sales?
The slowdown in housing sales is primarily due to a market correction following a period of record-breaking sales and supply infusions after the Covid-19 pandemic. Speculative buying in premium and luxury segments has caused prices to rise unsustainably, leading to a natural correction.
Are investors still a significant part of the housing market?
No, investors now make up less than 10% of housing buyers. The market is primarily driven by end-users who buy homes to live in them, not to rent out or flip for quick profits.
How has affordability improved for homebuyers?
Home loan interest rates have declined, and government schemes like PMAY and state-level incentives are available for first-time and affordable housing buyers. Housing affordability has improved to its best levels since the Covid-19 pandemic in most major cities.
What are the benefits for end-users in the current market?
End-users benefit from attractive deals offered by builders, including discounts, flexible payment plans, and various add-ons. Rising rental values in major cities make owning a home more financially viable compared to renting.
What are the long-term prospects for the Indian housing market?
India’s GDP growth is robust, and household incomes are rising, supporting long-term housing demand. The real estate sector is growing at a CAGR of over 24%, and housing remains the most incentivized asset class in India, offering significant tax breaks and financial benefits.
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