Housing Market in 2025: Sales Moderate, Prices Remain Steady

India's residential real estate market gradually returned to normal during 2025, with housing demand weakening from the peak levels of the previous two years but remaining resilient at the core. The housing market report for the whole year 2025, titled Real Insight Residential CY 2025 and published by PropTiger.com, reveals that this moderation is a healthy rebalancing of the market rather than a permanent lull. Factors such as rising base effects, buyers' selectiveness, and a gradual shift towards end-user-driven consumption contributed to this stabilization, while long-term drivers like urbanization, income growth, and infrastructure spending continue to provide support.

Residential sales across the top eight cities in India were down by 12% year on year to 386,365 units in 2025, compared to 436,992 units in 2024. This marked the lowest level of annual sales since 2022, signaling the end of the post-pandemic rally. However, the market experts had already anticipated this decline to a large degree, as it followed record-breaking sales in the past years. Despite the fall, the volume of sales remained significantly higher than the pre-pandemic average, indicating that the sector is still robust and buyers remain confident.

Quarterly changes throughout the year further revealed this gradual moderation. Residential sales in Q4 2025 were 10% lower than in the same quarter of the previous year, and there was a slight drop of 0.5% in sales on a quarter-to-quarter basis, down to 95,049 units. This number represents the lowest quarterly sales since Q2 2023, when sales were at 80,250 units. The final quarter's performance was partly due to buyers making more cautious decisions in the face of price firmness and selective supply, particularly for mid-to-premium home segments.

2025, in general, saw quarterly sales gradually decreasing from 98,095 units in Q1 to 95,049 units in Q4, indicating that demand was being postponed rather than falling. It seems that buyers took a more thoughtful approach, focusing on project quality, location, and the credibility of the developer. The trend points towards a more mature housing market where growth is less reliant on speculation and more on sustainability, providing a stable base for balanced expansion over the next few years.

Mr. Onkar Shetye, Executive Director of Aurum PropTech, commented, “2025 was not a year of demand destruction, but one of recalibration. Buyers remained active but more deliberate, while developers responded with disciplined supply management. This prevented inventory stress and helped prices remain resilient despite softer volumes.”

The slowdown was most pronounced in Q2 2025, which emerged as the weakest quarter in terms of new supply due to seasonal factors and heightened buyer caution. However, deferred demand was absorbed steadily in the second half of the year, particularly in southern markets. City-level divergence widened throughout the year. Hyderabad and Chennai emerged as consistent outperformers, recording sustained quarterly and year-on-year growth, while Mumbai and Bengaluru displayed volatility but closed the year on a firmer footing. Delhi NCR remained the only major market to record year-on-year sales declines across all four quarters, reflecting prolonged consolidation.

The total new supply across the eight cities fell 6% to 361,096 units in 2025, compared to 385,221 units in 2024, marking the lowest annual supply since 2021. In the October-December (Q4) 2025 period, supply rose 4% year on year and 0.2% quarter on quarter to 92,007 units.

Despite moderated sales, residential prices continued to rise across key markets, supported by limited ready inventory, elevated construction costs, and calibrated new supply. Developers largely avoided aggressive discounting, reinforcing pricing discipline. “The housing market is transitioning into a more mature, execution-led phase,” added Mr. Onkar Shetye. Growth in 2026 is likely to be driven by affordability, infrastructure-led micro-markets, and city-specific fundamentals rather than broad-based acceleration.

Going forward, the residential real estate market in India is predicted to move along a steady, quality-led growth trajectory rather than a fast expansion one. Demand shifting towards end-users, developers will probably stay disciplined regarding new launches by focusing on execution, project credibility, and location-specific offerings. Infrastructure development, better affordability in a few micro-markets, and stable macroeconomic fundamentals will support buyer sentiment, while calibrated supply will act as a check on inventory stress. Hence, 2026 may witness balanced growth influenced by city-specific dynamics, sustainable pricing, and a maturing market that favors long-term value over short-term volume.