The Indian real estate market witnessed a notable decline in residential sales in the first quarter of 2025. A total of 93,280 units were sold across key markets, marking a significant drop from the 1.30 lakh units sold during the same period in 2024. Several factors, including higher home loan rates, economic uncertainties, and revised regulatory measures, contributed to this downward trend in homebuyer sentiment.
MMR & Pune Account for 51% of Total Sales
Despite the overall slowdown, the Mumbai Metropolitan Region (MMR) and Pune remained the dominant players in the residential real estate market. Together, these regions accounted for 51% of total sales in Q1 2025. Robust infrastructure development, improved connectivity, and a growing IT and corporate workforce continued to drive demand in these key markets.
Hyderabad Records the Highest 49% Yearly Drop in Sales
Hyderabad’s real estate market experienced the steepest decline among all major cities, with a 49% year-on-year (Y-o-Y) drop in residential sales. Market experts attribute this sharp decline to a combination of regulatory changes, increased property prices, and cautious consumer sentiment. The once-thriving demand in the city took a hit as potential homebuyers adopted a wait-and-watch approach in anticipation of better deals.
New Launches Down by 10% Y-o-Y
New project launches also saw a decline, registering a 10% drop compared to Q1 2024. Developers exercised caution amid fluctuating demand and focused on clearing existing inventory before introducing fresh supply into the market. The slowdown in new launches reflects a strategic recalibration by real estate firms to align with evolving market conditions and shifting consumer preferences.
NCR, Bengaluru, Kolkata See a Yearly Jump in New Supply
While overall new launches declined, the National Capital Region (NCR), Bengaluru, and Kolkata bucked the trend with an increase in fresh supply. These cities saw a surge in project launches as developers capitalized on growing demand in emerging micro-markets. The expansion of IT hubs, improved infrastructure, and increased investor interest played a pivotal role in boosting the supply pipeline in these regions.
Hyderabad Records the Highest 55% Yearly Decline
Hyderabad not only faced a significant drop in sales but also recorded the steepest decline in new supply, with a 55% yearly decrease. Developers in the city slowed down project launches, likely in response to weaker buyer demand and economic uncertainties. This decline suggests a period of market consolidation, where developers prioritize sales of existing inventory before introducing new projects.
Conclusion
The first quarter of 2025 has presented a mixed landscape for India’s residential real estate sector. While overall sales have declined, some regions continue to exhibit resilience with an uptick in new supply. Developers and homebuyers alike are navigating a cautious market environment, influenced by financial conditions and evolving economic trends. The coming quarters will be crucial in determining whether the market rebounds or continues its slowdown.
