Housing Sales Decline by 23% in Q1 2025, But Bengaluru and Delhi NCR Defy the Trend

In partnership with

Stay Informed, Without the Noise.

Your inbox is full of news. But how much of it is actually useful? The Daily Upside delivers sharp, insightful market analysis—without the fluff. Free, fast, and trusted by 1M+ investors. Stay ahead of the market in just a few minutes a day.

Subscribe today.

India’s housing market is witnessing a significant correction after three years of record-breaking supply in 2021, 2022, and 2023. The first quarter of 2025 saw a 23% decline in housing sales across the country, while new housing supply fell by 34%, according to a report by PropEquity, an NSE-listed real estate data analytics firm.

The report highlights that total housing sales across the top nine cities in India stood at 1,05,791 units in Q1 2025, down from 1,36,702 units in Q1 2024. The decline was largely driven by market saturation, price increases, and cautious investor sentiment amid economic and geopolitical uncertainties. However, Bengaluru and Delhi-NCR stood out as exceptions, experiencing a surge in sales despite the overall slowdown.

Bengaluru Leads the Market, Delhi NCR Also Sees Growth

While most major Indian cities struggled, Bengaluru and Delhi NCR saw positive sales growth, reflecting sustained demand and resilience in these markets.

• Bengaluru emerged as the strongest performer, recording a 10% increase in sales. The city sold 18,508 units in Q1 2025, up from 16,768 units in the same period last year. Its share of total national sales increased from 12% in Q1 2024 to 17% in Q1 2025.

• Delhi-NCR also posted a 10% increase, with 11,221 housing units sold in Q1 2025, compared to the previous year’s 10,200 units. This indicates that the region’s real estate market remains robust and in demand, even as other cities faced sharp declines.

Major Cities Experience Steep Declines

While Bengaluru and Delhi NCR performed well, most other major real estate markets saw double-digit declines in sales:

• Hyderabad: -47% (The biggest drop among all cities)

• Mumbai: -36%

• Pune: -33%

• Kolkata: -28%

• Thane: -27%

• Navi Mumbai: -7%

• Chennai: -2%

This widespread slowdown suggests a consolidation phase in the Indian real estate sector, with demand cooling off in previously high-growth markets like Hyderabad, Mumbai, and Pune.

New Housing Supply Shrinks for Third Consecutive Quarter

In addition to declining sales, the real estate market also saw a major drop in new housing supply.

• Total new housing supply in Q1 2025 stood at 80,774 units, a sharp decrease from 1,22,365 units in Q1 2024.

• This marks the third consecutive quarter where new housing supply has remained below the 1 lakh unit mark, highlighting developers’ cautious approach amid declining sales.

Bengaluru Again Defies the Trend

• Bengaluru was the only city to record a 17% increase in new housing launches, reaching 20,227 units in Q1 2025.

• The city now accounts for 25% of all new housing supply in India.

Cities with the Sharpest Drop in Housing Supply

Several major real estate markets significantly reduced their new housing supply, reflecting weak buyer sentiment and developer caution:

• Kolkata: -62% (Largest decline in supply)

• Mumbai & Thane: -50%

• Pune: -48%

• Chennai: -46%

• Hyderabad: -38%

• Navi Mumbai: -24%

• Delhi-NCR: -14%

The decline in new housing launches indicates that developers are adjusting their supply strategies, focusing on liquidating existing inventory rather than bringing in new projects.

Market Correction: Understanding the Shift in Housing Trends

Why Is the Housing Market Slowing Down?

According to Samir Jasuja, Founder & CEO of PropEquity, India’s housing market is undergoing a correction phase after experiencing three consecutive years of oversupply (2021-2023).

Several factors have contributed to this slowdown:

✅ Rising Home Prices: Increasing costs have made housing less affordable for buyers.
✅ Investor Caution: Economic and geopolitical uncertainties have led to a more conservative investment approach.
✅ Market Saturation: Some cities, particularly Hyderabad, Pune, and Thane, saw a rapid surge in supply in 2022-2023, leading to oversupply issues.

Despite the slowdown, the absorption-to-supply ratio remains healthy at 131% in Q1 2025, slightly down from 132% in Q4 2024. This means that even though supply has decreased, the number of houses being sold is still outpacing new launches, indicating that demand has not collapsed entirely.

Key Takeaways from Q1 2025 Housing Market Trends

1️⃣ Bengaluru Leads Sales Growth: With a 10% increase in sales and a 17% rise in new launches, Bengaluru remains India’s most resilient housing market.

2️⃣ Delhi-NCR Shows Stability: Despite short-term fluctuations, Delhi-NCR continues to attract buyers, recording a 10% year-on-year growth in sales.

3️⃣ Hyderabad Faces the Sharpest Decline: A 47% drop in sales indicates that buyer interest has significantly weakened, likely due to oversupply in previous years.

4️⃣ Developers Are Slowing Down Supply: New launches are at their lowest in three quarters, reflecting developer caution amid weak demand.

5️⃣ Housing Demand Persists, But Growth is Slower: Despite declining sales, the absorption-to-supply ratio remains strong, signaling that the market is adjusting rather than collapsing.

Outlook for the Real Estate Market in 2025

Experts predict that India’s housing market will continue its correction phase in 2025, with sales and supply likely to stabilize in the coming quarters. However, demand remains strong in select cities like Bengaluru and Delhi-NCR, while high-supply regions like Hyderabad, Pune, and Thane are experiencing a market reset.

Going forward, developers may focus on:

📌 Affordable and mid-segment housing, as these continue to attract buyers despite rising prices.
📌 Completion of ongoing projects rather than launching new ones, to clear inventory and reduce market risk.
📌 Adjusting pricing strategies to attract buyers amid rising interest rates and cautious investment sentiment.

Overall, while the housing sector is slowing down, it remains resilient, with demand continuing to outpace supply in key regions. The next few quarters will be crucial in determining whether the market can bounce back or enter a prolonged slowdown.