India’s housing sector is expected to witness a noticeable downturn in the first quarter of 2025, with both sales and new supply showing sharp declines. As per the latest data from real estate analytics firm PropEquity, housing sales across nine major cities are projected to drop by at least 23 percent, largely influenced by elevated property prices and increasing investor caution stemming from global geopolitical tensions.
Falling Supply Signals Cautious Market Sentiment
The report highlights that new housing supply has also taken a substantial hit, dropping by 34 percent during the January to March 2025 period. Compared to 1,22,365 units launched in the same quarter last year, only 80,774 units were introduced to the market this year. This marks the third consecutive quarter in which new housing launches have stayed below the one lakh unit threshold, signaling a shift in developer strategy amid evolving demand dynamics.
Decline Widespread Except in Two Cities
Among the nine cities surveyed Mumbai, Navi Mumbai, Thane, Pune, Delhi-NCR, Bengaluru, Chennai, Hyderabad, and Kolkata only Delhi-NCR and Bengaluru are poised to post positive sales figures. According to PropEquity, Delhi-NCR is expected to record a 10 percent increase in sales, reaching 11,221 units, up from 10,235 units last year. Bengaluru is also projected to post a similar 10 percent growth, with sales expected to hit 18,508 units in Q1 2025.
Regional Variations Reflect Changing Demand Patterns
The report underscores a significant contraction in housing demand across several major metros. Hyderabad is anticipated to see the steepest drop, with sales forecasted to plunge by 47 percent. Mumbai is likely to experience a 36 percent decline, followed by Pune at 33 percent, Kolkata at 28 percent, Thane at 27 percent, Navi Mumbai at 7 percent, and Chennai at 2 percent. These declines suggest that buyers are holding back amidst uncertainties and price pressures.
Supply Drops Even in Traditionally Strong Markets
While Bengaluru is expected to defy the trend with a 17 percent rise in new housing supply reaching 20,227 units other cities have not fared as well. Kolkata leads the drop with a 62 percent decrease, followed closely by Mumbai and Thane with 50 percent each. Pune saw a 48 percent decline, Chennai 46 percent, Hyderabad 38 percent, Navi Mumbai 24 percent, and Delhi-NCR 14 percent. The data reflects a broad-based supply correction, even in markets historically known for high inventory levels.
Shifting Dynamics After Three Years of Growth
According to Samir Jasuja, Founder and CEO of PropEquity, the housing market is undergoing a correction after three successive years of unprecedented supply growth between 2021 and 2023. He attributed the current decline to both rising property prices and heightened caution among investors, who are reacting to broader geopolitical risks and economic uncertainties. Despite the drop in absolute sales, Jasuja noted that demand remains relatively strong when measured against supply, with the absorption-to-supply ratio at a healthy 131 percent in Q1 2025.
Tier-1 Cities See Lower Launch Volumes
The combined supply from Hyderabad, Pune, and Thane the top three cities for housing supply in 2022 and 2023 has dropped significantly. In Q1 2025, these cities recorded 28,227 fewer units launched compared to the same quarter last year. Their cumulative contribution to national housing launches fell from 38 percent in Q1 2024 to just 29 percent in the current quarter, indicating a substantial pullback from builders in these high-volume markets.
Overall Market Outlook Mixed as Developers Reassess Strategies
While the drop in housing sales and supply indicates a cooling in market enthusiasm, it may also represent a phase of recalibration. Developers appear to be re-evaluating project pipelines in response to economic indicators and buyer sentiment. At the same time, cities like Bengaluru and Delhi-NCR remain resilient, supported by sustained demand, suggesting that the market slowdown is not universal but rather segmented by region and pricing.