Indian Housing Market Set for Modest Growth in 2025: Experts
India's primary housing market is expected to see a modest single-digit price rise in 2025, following a 21% appreciation in 2024. Property experts predict that increased supply and potential policy incentives will drive this trend.
Housing MarketReal EstateRbi Repo RateAffordable HousingUnion BudgetReal Estate NewsJan 01, 2025
According to industry experts, the rise in prices will be driven by an expected increase in new supply and potential policy incentives from the government.
Real estate developers and property consultants are hopeful that the Reserve Bank of India (RBI) will cut the repo rate this year, leading to lower interest rates on home loans.
Additionally, they are looking forward to fiscal incentives in the upcoming Union Budget to boost both supply and demand in the affordable housing segment, which has seen a decline in recent years.
New home sales across seven major cities declined for the first time since the pandemic, primarily due to a sharp rise in housing prices and elevated borrowing costs.
Data from Anarock, a real estate consultancy, shows that sales volume fell by 4% in 2024, totaling 459,650 units across the seven cities.
New supply also dropped by 7%, to 412,520 units.
This decline marks the first drop in sales after three years of steady growth following the COVID-19 pandemic.
The sales figures were attributed to a high base effect, a decrease in new launches, and an increase in prices.
The housing market experienced a significant downturn during the pandemic, with sales plunging by 47% in 2020.
However, sales rebounded strongly in subsequent years, growing by 71%, 54%, and 31% in 2021, 2022, and 2023, respectively.
Despite this, 2024 saw a marginal decline in sales across key cities such as Delhi-NCR, Mumbai Metropolitan Region, Kolkata, Chennai, Hyderabad, Bengaluru, and Pune.
Anarock Chairman Anuj Puri expects the housing market to stabilize in 2025, with a more muted growth in prices compared to the 21% increase witnessed in 2024.
Frequently Asked Questions
What is the expected price growth in India's housing market in 2025?
India's primary housing market is expected to see a modest single-digit price rise in 2025, following a 21% appreciation in 2024.
Why did new home sales decline in 2024?
New home sales across seven major cities declined in 2024 due to a sharp rise in housing prices and elevated borrowing costs, which reduced buyer interest.
What policy changes are real estate experts hoping for in the upcoming Union Budget?
Real estate experts are hoping for fiscal incentives, such as an increase in the deduction limit of interest on home loans under the Income Tax Act, to boost the affordable housing segment.
How has the Indian real estate market performed over the past few years?
The Indian real estate market saw a 47% decline in sales in 2020 due to the pandemic but rebounded with 71%, 54%, and 31% growth in 2021, 2022, and 2023, respectively. However, 2024 witnessed a marginal decline in sales.
What is the projected size of the Indian real estate market in the future?
According to a Naredco-Knight Frank report, the Indian real estate market size is projected to reach USD 5.8 trillion by 2047, with CREDAI and Colliers estimating it to grow to USD 5-7 trillion by the same year.
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