India Housing Sales Fall 16% in Q3 FY25 Across Top Cities: Hyderabad Sees Sharpest Decline.

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India Housing Sales Fall 16% in Q3 FY25 Across Top Cities: Hyderabad Sees Sharpest Decline.

India’s housing sales declined 16% in Oct–Dec across the top nine cities, with Hyderabad recording a 19% fall.

Here’s a data-driven analysis and future outlook for the real estate market.

India’s residential real estate market witnessed a notable slowdown during the October–December quarter, with housing sales declining 16% year-on-year across the top nine cities, according to industry estimates cited in recent reports.

The moderation comes after several quarters of strong post-pandemic recovery driven by pent-up demand, festive buying, and end-user participation.

Among major cities, Hyderabad recorded the steepest decline, with housing sales falling 19% to 11,323 units, compared to 13,902 units in the same period last year. This marks a clear shift in momentum for a market that had been one of the fastest-growing residential hubs in India over the past five years.

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City-wise Snapshot of the Slowdown.

The decline was broad-based, though the intensity varied by market:

Hyderabad: Sales fell 19%, reflecting affordability pressure, cautious buyer sentiment, and a pivot toward premium and plotted developments.
Pune: Registered a sharp 31% decline, driven by high base effects and reduced investor activity.

Chennai: Sales declined by around 3%, showing relative resilience supported by steady end-user demand.

Kolkata: Witnessed an 11% fall, largely due to slower new launches.

Mumbai Metropolitan Region (MMR): Sales were relatively stable, supported by infrastructure-led micro-markets and continued demand for mid-income housing.

Delhi-NCR: Continued to see subdued volumes, although select premium and luxury segments remained active.

Overall, the data suggests that value growth has outpaced volume growth, as developers increasingly focus on higher-ticket projects rather than mass housing.

Key Reasons Behind the Decline.

Several structural and cyclical factors contributed to the Q3 slowdown:

High Base Effect: The October–December quarter of the previous year saw unusually strong sales due to festive demand and aggressive project launches.

Elevated Home Loan Rates: Since May 2022, the RBI has raised policy rates by 250 basis points, keeping effective home loan rates in the 8.5–9.5% range, impacting affordability.

Shift Toward Premium Housing: Developers are prioritising premium and luxury segments, which naturally have lower transaction volumes.

Cautious Buyer Sentiment: Global economic uncertainty and inflationary pressures have led buyers to defer large-ticket purchases.

Limited New Launches in Affordable Segment: Supply constraints in budget housing continue to weigh on volumes.

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Future Outlook: What Lies Ahead for Indian Housing?

Despite the short-term dip, the medium- to long-term outlook for India’s residential real estate remains stable to positive, supported by multiple structural drivers:

Interest Rate Stability: With inflation moderating, expectations of rate cuts or at least policy stability in 2026 could revive demand, especially among first-time buyers.

Healthy Inventory Levels: Unsold inventory across major cities remains well below pre-pandemic peaks, indicating a balanced market.

Urbanisation and Job Growth: Continued migration to cities, growth in IT, BFSI, and manufacturing sectors, and rising household incomes will support housing demand.

Infrastructure Push: Metro expansions, expressways, and regional connectivity projects are improving the attractiveness of peripheral micro-markets.

End-User Dominance: Speculative activity remains limited, making the market fundamentally stronger and less prone to sharp corrections.

Markets such as Hyderabad, Pune, and Bengaluru are expected to stabilise over the next two to three quarters, with volumes improving once borrowing costs ease and new supply aligns with affordability thresholds.

Conclusion

The 16% decline in housing sales during Q3 signals a period of consolidation rather than a structural downturn. While volumes have moderated, pricing discipline, healthier balance sheets, and end-user-led demand indicate a more mature real estate cycle. As macroeconomic conditions improve, India’s housing market is likely to regain momentum, albeit at a more sustainable pace.