India's Real Estate Market Faces Major Setback: Sales and Supply Drop Below 1 Lakh Units
India's residential real estate market is facing a significant slowdown, with sales and supply dropping below 1 lakh units for the first time in 14 quarters. This downturn raises concerns about a potential market cooldown after years of post-COVID recovery.
Real EstateMarket CooldownResidential SalesSupply DropIndian CitiesReal Estate NewsJun 22, 2025
During Q2 2025 (April–June), residential sales in nine major Indian cities decreased by 19% year-on-year to 94,864 units from 116,432 units in the corresponding quarter last year. Supply also saw a 30% year-on-year drop to 82,027 units, the fourth consecutive quarter where new inventory remained below 1 lakh units. This is the first time since Q3 2021 that both sales and supply have been below the 1 lakh unit level simultaneously, raising eyebrows over a possible market cooling.
According to the report, 7 out of 9 cities experienced a year-on-year decline in housing sales, with Mumbai and Thane witnessing the steepest drops at 34% each. The only exceptions were Delhi-NCR and Chennai, where sales increased by 16% and 9%, respectively. On the supply side, Mumbai led the fall with a 61% decline, while Delhi-NCR (+37%), Hyderabad (+19%), and Chennai (+6%) were the only cities to report growth.
Samir Jasuja, PropEquity Founder and CEO, commented, “This is a crucial inflection point. Cities like Mumbai, Navi Mumbai, and Bengaluru, which were on a high in 2023 and 2024, are now stabilizing to more realistic levels.” Quarter-to-quarter, the figures show a 10% decline in sales and a 2% increase in supply. Chennai, Hyderabad, Kolkata, Pune, and Delhi-NCR registered increasing inventory, but only four cities—Chennai, Hyderabad, Kolkata, and Delhi-NCR—saw an increase in sales compared to the last quarter.
The growth in Delhi-NCR was primarily driven by activity in Ghaziabad and Greater Noida, the report added. With both sales and supply slowing down, experts believe India's real estate market could be entering a correction and consolidation phase following a prolonged period of growth.
This slowdown is particularly significant as it comes after a period of robust recovery post-COVID, where the real estate sector saw a surge in demand and supply. The sudden drop in sales and supply indicates that the market may be reaching a saturation point, and buyers are becoming more cautious in their purchasing decisions.
The real estate sector is a crucial driver of the Indian economy, contributing to employment, infrastructure development, and overall economic growth. A slowdown in this sector could have broader implications for the economy, affecting related industries such as construction, finance, and retail.
As the market adjusts to these new conditions, developers and policymakers will need to adapt their strategies to address the changing dynamics. This may involve offering more competitive pricing, enhancing the quality of projects, and focusing on sustainable development practices to attract buyers and investors.
In conclusion, the recent drop in residential sales and supply in India's prime cities signals a potential market cooldown. While some cities continue to show resilience, the overall trend suggests that the real estate sector is entering a new phase of consolidation and adjustment. Stakeholders will need to closely monitor these developments to navigate the changing market landscape effectively.
Frequently Asked Questions
What is the current state of India's residential real estate market?
India's residential real estate market has seen a significant slowdown, with sales and supply dropping below 1 lakh units for the first time in 14 quarters. This marks a potential market cooldown after several years of post-COVID growth.
Which cities saw the steepest decline in housing sales?
Mumbai and Thane saw the steepest decline in housing sales, with both cities experiencing a 34% year-on-year drop.
What factors are contributing to the slowdown in the real estate market?
The slowdown is attributed to a combination of market saturation, buyer caution, and a decrease in new inventory. These factors suggest that the market may be reaching a more stable and realistic level after a period of robust growth.
How are developers and policymakers responding to the market changes?
Developers and policymakers are adapting their strategies to address the changing market dynamics. This includes offering more competitive pricing, enhancing project quality, and focusing on sustainable development practices to attract buyers and investors.
What are the broader implications of a slowdown in the real estate sector?
A slowdown in the real estate sector can have broader implications for the economy, affecting related industries such as construction, finance, and retail. It may also impact employment and infrastructure development.
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