India’s residential real estate market eased into a phase of normalisation in calendar year 2025, as demand moderated after two strong years but avoided any sharp correction. According to Real Insight – Residential CY 2025, PropTiger.com’s annual housing report, the market showed signs of maturity rather than stress, marked by softer volumes, controlled supply, and stable pricing.
Across the top eight cities, housing sales declined 12% year-on-year to 3,86,365 units in 2025, the lowest annual figure since 2022. New launches also cooled, falling 6% to 3,61,096 units, the weakest supply addition since 2021. Yet, despite slower activity, prices across key markets continued to rise, underlining the sector’s structural resilience.
Quarterly trends signal cautious buyers
The moderation in demand became more visible through the year. Quarterly sales tapered from 98,095 units in Q1 2025 to 95,049 units in Q4 2025. The final quarter recorded the lowest quarterly sales since Q2 2023, reflecting buyer caution rather than an exit from the market.
Sales in Q4 2025 fell 10% year-on-year and 0.5% quarter-on-quarter. The sharpest slowdown was seen in Q2 2025, when seasonal factors and heightened uncertainty made buyers defer decisions. However, this deferred demand did not disappear. It was gradually absorbed in the second half of the year, particularly in southern cities.
“2025 was not a year of demand destruction, but one of recalibration,” said Onkar Shetye, Executive Director, Aurum PropTech. Buyers remained active but more deliberate, while developers responded with disciplined supply management, helping avoid inventory stress.
City markets move at different speeds
Divergence between city markets widened through 2025, highlighting the growing importance of local fundamentals. Hyderabad and Chennai emerged as consistent outperformers, posting strong quarterly and annual growth in both sales and new supply. Chennai, in particular, recorded a 55% jump in annual sales and nearly 50% growth in new launches, supported by infrastructure expansion and improving affordability.
Hyderabad continued its steady run, with annual sales rising 6% and supply increasing 18%, driven by sustained end-user demand and a strong office market spillover.
Bengaluru showed volatility through the year but closed 2025 on a firmer footing, ending with a 13% rise in annual sales and a matching increase in supply. Mumbai, however, saw sharper corrections, with sales declining 26% and supply falling 25%, reflecting affordability pressures and a cautious luxury segment.
Pune also witnessed a notable slowdown, with annual sales down 27% and supply contracting 17%, as buyers turned selective amid rising prices. Delhi NCR stood out as the only major market to record year-on-year sales declines across all four quarters, pointing to prolonged consolidation and cautious sentiment.
Supply discipline reshapes the cycle
Developers across cities showed restraint in launching new projects, a shift from earlier boom-and-bust cycles. Total new supply across the eight cities fell to its lowest level in four years, even as Q4 2025 saw a marginal recovery with launches rising 4% year-on-year.
This calibrated approach helped keep inventory levels in check and prevented aggressive discounting. Developers largely chose to protect margins rather than chase volumes, a strategy that reinforced price stability despite slower sales.
Limited ready inventory, higher input costs, and labour expenses further supported prices. With fewer completed units available in prime locations, buyers had little leverage to negotiate deep discounts, even in a softer market.
Prices stay firm amid softer volumes
One of the most striking features of 2025 was the resilience of residential prices. Despite lower transaction volumes, prices continued to edge up across most markets. Elevated construction costs, tighter regulatory compliance, and disciplined supply ensured that developers held firm on pricing.
This pricing behaviour signals a transition towards an execution-led market, where credibility, delivery timelines, and product quality matter more than speculative momentum. Buyers, too, appeared willing to pay for well-located projects with clear delivery visibility, even if they delayed purchase decisions.
What lies ahead for 2026
Looking forward, the sector appears poised for steady, selective growth rather than a broad-based surge. According to PropTiger, growth in 2026 is likely to be driven by affordability-led segments, infrastructure-linked micro-markets, and city-specific demand drivers.
“The housing market is transitioning into a more mature phase,” Shetye noted. Factors such as metro expansions, road connectivity, and employment hubs will shape demand more decisively than headline sentiment.
After a year of measured slowdown, India’s housing market seems to have found a new rhythm. Volumes may remain moderate, but disciplined supply, improving execution, and grounded buyer expectations suggest a more stable and sustainable growth cycle ahead.
