India's Housing Market Slows, but Organised Developers Remain Resilient
Despite a temporary slowdown in sales in March and April, organised developers like Prestige Estate and Brigade Enterprise are expected to see growth, driven by government incentives and lower interest rates.
Real EstateHousing MarketOrganised DevelopersSales SlowdownCapital InvestmentReal Estate PuneMay 23, 2025
While the residential real estate industry had a promising start in 2025, it experienced a slowdown in March, which continued into April. The demand for residential real estate fell by 2 per cent in value on both a year-over-year (YoY) and sequential basis in April. Additionally, sales by volume were down by 15 per cent YoY in April.
According to the Nuvama report, Hyderabad and Pune witnessed the most significant decrease in sales by value. In April, sales in Hyderabad and Pune decreased by 19 per cent and 16 per cent, respectively. While sales in Chennai remained flat, Kolkata registered a 7 per cent decrease. Bangalore and Delhi NCR were the only two metro cities that saw an increase, with 14 per cent and 7 per cent growth by value, respectively. Municipal sales remained almost flat, with just 1 per cent growth.
The slowdown in the housing market has also affected the launches of new projects. In April, new project launches declined by 29 per cent YoY in the seven key metro cities in India. However, Hyderabad and Kolkata saw an increase of 64 per cent and 36 per cent YoY, respectively, while every other metropolitan city experienced a decrease in new launches in April.
Despite the slowdown in new project launches, the inventory has remained steady at 17 months in April. Hyderabad has the highest inventory of 26 months, while Pune and NCR have the best markets with an inventory of 11 to 12 months.
Housing prices in the seven cities have been on the rise, raising concerns about affordability. The luxury or premium segment has performed well, leading to an overall increase in housing prices. In April, prices grew by 20 per cent YoY in Kolkata, followed by Mumbai and Bengaluru, which saw an 18 per cent YoY increase in both cities. Delhi NCR experienced an 11 per cent YoY increase in housing prices. Hyderabad, Chennai, and Pune also registered a 9 per cent, 8 per cent, and 9 per cent, respectively, YoY growth in residential real estate in April.
Despite the slowdown in March and April, 2025 has been a year of growth for organised real estate companies, according to the Nuvama report. The report highlights that lower interest rates and government incentives are among the key factors contributing to the growth of these companies. Additionally, the increase in the safe harbour limit—the threshold between the stamp duty value and actual transaction value—and the demand for larger homes following the COVID-19 pandemic have also favored organised real estate players.
The Nuvama research suggests that, in the long term, with a strong balance sheet and brand recognition, the rise in capital investment in real estate will further aid the major companies in the housing market. The report indicates that the sales volume slowdown in the residential market might be coming to an end, and with a robust launch pipeline, organised developers are better prepared to absorb the increase in demand.
Frequently Asked Questions
What caused the slowdown in the residential real estate market in March and April 2025?
The slowdown in the residential real estate market in March and April 2025 was primarily due to a decrease in demand, with sales falling by 2 per cent in value and 15 per cent in volume on a year-over-year basis.
Which cities saw the biggest decrease in sales by value in April 2025?
Hyderabad and Pune saw the biggest decrease in sales by value in April 2025, with declines of 19 per cent and 16 per cent, respectively.
How has the inventory in the housing market been affected by the slowdown?
Despite the slowdown in new project launches, the inventory has remained steady at 17 months in April 2025. Hyderabad has the highest inventory of 26 months, while Pune and NCR have the best markets with an inventory of 11 to 12 months.
What factors are contributing to the growth of organised real estate companies?
The growth of organised real estate companies is being driven by lower interest rates, government incentives, an increase in the safe harbour limit, and the demand for larger homes post-COVID.
What does the Nuvama report suggest about the future of the residential real estate market?
The Nuvama report suggests that the sales volume slowdown in the residential real estate market might be coming to an end, and with a robust launch pipeline, organised developers are better prepared to absorb the increase in demand.
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