Across the top eight cities, residential sales declined 12% year-on-year to 3,86,365 units in 2025, down from 4,36,992 units in 2024. This marked the lowest annual sales level since 2022, reflecting a combination of high base effects, affordability pressures in certain markets, and more cautious buyer decision-making. Supply followed a similar trajectory. New launches fell 6% to 3,61,096 units, the lowest annual supply addition since 2021, pointing to deliberate restraint by developers keen to protect balance sheets and avoid inventory build-up.
The slowdown became more pronounced towards the end of the year. In the October–December quarter (Q4 2025), housing sales slipped 10% year-on-year and 0.5% sequentially to 95,049 units, the weakest quarterly absorption since Q2 2023, when sales had dipped to around 80,250 units. For the full year, quarterly sales eased gradually from 98,095 units in Q1 2025 to 95,049 units in Q4, signalling demand re-timing rather than a sharp contraction.
“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. This prevented inventory stress and helped prices remain resilient despite softer volumes.”
Q2 slump, H2 recovery
Within the year, Q2 2025 emerged as the weakest quarter, particularly on the supply side. Seasonal factors, a wait-and-watch approach among buyers, and elevated price levels in select markets led developers to slow new project announcements. This pause, however, did not translate into lasting weakness. Deferred demand was steadily absorbed in the second half of the year, especially in southern markets where job growth, infrastructure development, and relatively stable affordability continued to support end-user demand.
In Q4 2025, while sales were at a multi-quarter low, supply ticked up modestly. New launches in the quarter rose 4% year-on-year and 0.2% sequentially to 92,007 units, suggesting a cautious return of developer confidence as the year closed.
Sharp divergence across cities
The national slowdown masked sharp divergence at the city level, with southern markets emerging as clear outperformers while western and northern cities saw more pronounced corrections.
Mumbai, India’s largest housing market by value, witnessed one of the steepest slowdowns. Annual sales fell 26% to 1,05,595 units in 2025, compared with 1,43,487 units in 2024. In Q4 alone, Mumbai sales dropped 24% year-on-year to 25,617 units. High base prices, persistent affordability challenges, and selective buyer participation weighed heavily on volumes. Supply also tightened sharply, with annual launches down 25% to 1,03,793 units, reinforcing developers’ cautious stance.
Pune mirrored Mumbai’s trend, with annual sales sliding 27% to 59,223 units and Q4 sales plunging 28% year-on-year. New supply in Pune declined 17% for the year, as developers slowed launches amid moderating absorption and rising construction costs.
Delhi-NCR stood out as the weakest major market. The region recorded year-on-year sales declines across all four quarters of 2025, with annual absorption down 13% to 35,711 units. While Q4 sales dipped a relatively modest 6% year-on-year, the persistent softness highlighted prolonged consolidation, cautious buyer sentiment, and project-specific challenges. Supply in NCR remained broadly flat, slipping 2% year-on-year for the full year.
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In contrast, southern cities told a very different story. Chennai emerged as a standout performer, with annual sales surging 55% to 24,892 units. Q4 sales alone jumped 71% year-on-year, reflecting strong end-user demand, a low unsold inventory base, and increased project launches. New supply in Chennai rose sharply as well, climbing 49% for the year, as developers responded to improving absorption.
Hyderabad continued its steady run, posting a 6% increase in annual sales to 54,271 units and a 10% year-on-year rise in Q4 sales. Supply growth remained robust, with launches up 18% for the year, driven by infrastructure-led corridors and sustained demand in the mid-income and upper-mid segments.
Bengaluru stood out among large metros, clocking a 13% rise in annual sales to 54,414 units even as new supply grew in tandem by 13%. Q4 sales in the city increased 5% year-on-year, highlighting the depth and resilience of end-user demand, supported by the technology sector, diversified employment base, and steady price appreciation.
Kolkata and Ahmedabad delivered mixed performances. Kolkata recorded a 12% rise in annual sales, aided by a strong second half, while Ahmedabad saw a 12% decline in yearly absorption despite a pickup in Q4 launches. Supply trends in these markets varied, underscoring the increasingly city-specific nature of India’s housing cycle.
Supply discipline keeps prices firm
Despite the 12% fall in sales and softer quarterly momentum, residential prices continued to firm across key markets in 2025. The report attributes this resilience to a combination of tight ready inventory, calibrated new launches, and elevated construction costs. Developers, having strengthened balance sheets over the past few years, largely avoided aggressive discounting even as volumes moderated.
Nationally, the restraint in supply was evident. Total new launches in 2025 were the lowest since 2021, and even in Q4—when supply rose modestly—developers remained selective about project timing, location, and product mix. Mumbai, Pune, and Ahmedabad saw significant cuts in annual supply, while Chennai, Hyderabad, Bengaluru, and Kolkata reported strong growth, reflecting confidence in local demand drivers rather than a broad-based expansion.
“The housing market is transitioning into a more mature, execution-led phase,” Shetye said. “Developers are prioritising sell-through, margins, and project completion over headline growth. This has fundamentally changed the supply response and supported price stability.”
A more selective buyer, a more cautious developer
The moderation in 2025 also reflected a change in buyer behaviour. After several years of pent-up demand and urgency-driven purchases, homebuyers became more selective, taking longer to close deals and focusing on project quality, location, and long-term value. Higher ticket sizes in certain markets and limited affordability relief further encouraged a more deliberate approach.
Developers, in turn, responded by aligning supply more closely with visible demand. The days of large speculative land banks and aggressive pre-sales appear to be giving way to a more cautious, phased development strategy, particularly in mature markets.
Outlook for 2026
Looking ahead, PropTiger’s report suggests that growth in 2026 is likely to be uneven but structurally sound. Rather than a broad-based acceleration, momentum is expected to come from affordability-led segments, infrastructure-linked micro-markets, and cities with strong employment fundamentals. Southern markets are likely to remain relatively resilient, while western and northern metros may continue to see selective recovery depending on price corrections, interest rate movements, and policy support.
The experience of 2025, industry watchers say, may ultimately strengthen the sector. By reinforcing supply discipline, curbing speculative excesses, and shifting the focus towards execution and end-user demand, the year marked a reset in expectations for India’s housing market.
As the sector enters 2026, the message from the data is clear: volumes may ebb and flow, but a structurally tighter market, healthier balance sheets, and disciplined pricing have given India’s residential real estate a firmer footing than in previous downcycles.
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