Residential property prices are increasing rapidly in the big cities of the country, but the number of home buyers is decreasing. Even though the RBI has cut interest rates by 100 basis points in the April-June 2025 quarter, it has not had much impact on housing sales.
According to ANAROCK’s latest Q2 2025 PAN India Residential Market Viewpoints report, housing sales in the top 7 cities of India fell by 20% to 96,300 units y-o-y, while average property prices increased by 11%. These figures show that there is now a big gap between prices and sales, which is pointing to a big change in the country’s real estate market.
Why did sales fall?
While there was a slight increase of 3% in Q2 2025 compared to the previous quarter, there was a huge decline in the figures year-on-year.
Cities like Mumbai and Pune saw a 25-27% drop in sales. Hyderabad and NCR also saw a 27% and 14% drop, respectively.
On the other hand, Chennai surprised everyone with a 13% annual growth and a 40% increase from the previous quarter.
Buying a home has become more difficult for the middle class
The most surprising trend is that while sales have fallen, prices have risen even faster. NCR recorded a 27% increase, followed by Bangalore with 12% rise. Hyderabad, Chennai and Pune also witnessed 6–11% increase in prices.
The average property price across the country has increased from Rs 8,070 per sq.ft. to Rs 8,990 — an annual increase of 11%.
Rising costs, high land rates and demand for premium homes are the main reasons for this. This situation has become extremely challenging for middle-class buyers — they are now either having to postpone their decisions, or opt for smaller homes.
Boom in premium and luxury segments
This divergence between sales and prices points to a larger shift in India’s real estate dynamics. While premium and luxury housing is booming, affordability is a big challenge for the middle class. Builders are now targeting high-end customers instead of the middle class.
In Q2 2025, luxury housing (Rs 1.5–2.5 crore) accounted for 27% of all new launches, followed by high-end (Rs 80 lakh–1.5 crore) and mid-end (Rs 40–80 lakh) segments at 21% each. The ultra-luxury category (above Rs 2.5 crore) made up 19% of supply.
In contrast, affordable housing (below Rs 40 lakh) saw stagnation, contributing just 12% to total new launches.
This makes it clear that developers are no longer interested in low-margin affordable homes.
Inventory declines, but some cities see growth
Despite lower sales and fewer new launches (down 16% YoY), available inventory across the top 7 cities fell marginally by 3% YoY to 5.62 lakh units. In markets like Pune, available inventory fell 15% YoY, and MMR recorded a 9% decline.
On the other hand, Bengaluru’s inventory grew by 30%, hinting at a temporary mismatch between demand and supply.