After 12% sales drop, housing market enters 2026 on steady ground: Report

Residential sales fell 12% in 2025 as buyers turned cautious, but disciplined supply is expected to keep prices stable through 2026

India’s residential property market closed 2025 on a softer note, with home sales and new project launches moderating after two years of strong growth. But prices held firm in major cities, indicating the market will likely be stable in 2026, said a report on Thursday.

 

As many as 386,000 housing units were sold in eight major cities in 2025 — a 12 per cent drop from the previous year and the lowest annual level since 2022. New supply fell 6 per cent to about 361,000 units, marking the weakest annual additions since 2021, according to PropTiger’s Real Insight – Residential CY 2025 report.

 

Demand cools as buyers turn cautious

The moderation became more visible as 2025 had progressed. Quarterly sales eased through the year, ending at about 95,000 units in the October-December period. It was the weakest quarterly performance since April-June 2023, reflecting cautious buyer sentiment amid higher property prices and tighter household budgets, said the report.

 

“Market participants note that the slowdown did not reflect a collapse in demand. Buyers remained active but took longer to make decisions, while developers responded by pacing launches and focusing on execution rather than expansion,” it said.

 

Highlights from the report:

 

• Performance varied widely across regions, highlighting the growing importance of city-specific fundamentals.
• Chennai and Hyderabad emerged as consistent outperformers, reporting strong year-on-year growth in both sales and new supply.
• Bengaluru ended 2025 with higher annual sales despite intermittent volatility during the year.
• Mumbai and Pune saw sharp declines in annual sales, largely due to affordability pressures and limited fresh launches.
• Delhi NCR remained the weakest major market, recording year-on-year sales declines in every quarter of 2025.

 

This divergence is expected to persist into 2026, driven by differences in job growth, infrastructure spending and housing affordability.

 

Supply discipline keeps prices firm

New housing supply stayed tightly controlled through most of 2025. Although launches picked up modestly in the fourth quarter, overall additions remained well below recent peaks. Developers largely avoided aggressive discounting, supported by limited ready inventory and higher construction costs.

 

As a result, residential prices continued to edge up across most key markets, even as transaction volumes softened. Analysts say this supply discipline has helped prevent inventory build-up and preserved pricing power.

 

2026 outlook

For homebuyers, price corrections may remain limited, but slower sales could offer better negotiation room in select cities. Overall, the sector entered the year with balanced fundamentals, shifting focus from rapid growth to sustainability and execution.