Housing sales drop 23% in Q1 2025, Bengaluru and Delhi NCR buck trend

 India’s housing market continued to struggle in the first quarter of 2025, with a significant 23% drop in sales and a 34% fall in new housing supply, according to a report by PropEquity, an NSE-listed data analytics firm.  The report revealed that housing sales across India’s top 9 cities stood at 1,05,791 units in Q1 2025, a sharp decline from 1,36,702 units during the same period in 2024. While Bengaluru and Delhi-NCR were exceptions to this downward trend, the remaining cities faced a noticeable decline in both sales and supply.  Bengaluru emerged as the top performer, witnessing a 10% increase in housing sales, with 18,508 units sold in Q1 2025, compared to 16,768 units in the same period last year. The city accounted for 17% of the total sales in Q1 2025, up from 12% in Q1 2024. Meanwhile, Delhi-NCR also experienced a sales increase of 10%, reaching 11,221 units in the first quarter.  However, the rest of the cities faced steep declines. Hyderabad saw the most significant drop in sales, plunging by 47%, followed by Mumbai at 36%, Pune at 33%, Kolkata at 28%, Thane at 27%, and Navi Mumbai at 7%. Chennai saw a smaller decrease of 2%.  On the supply side, the overall housing supply in the first quarter of 2025 was recorded at 80,774 units, a substantial decrease from 1,22,365 units in Q1 2024. This marks the third consecutive quarter where new housing supply has remained below the 1 lakh unit mark. Bengaluru, however, saw an increase in new supply, with 20,227 units launched in Q1 2025, up 17% from the previous year, and accounting for 25% of total launches. 

  In contrast, supply fell the most in Kolkata by 62%, followed by Mumbai and Thane at 50%, Pune at 48%, and Chennai at 46%. Hyderabad also saw a 38% drop in new launches, while Navi Mumbai and Delhi-NCR experienced declines of 24% and 14%, respectively.  Samir Jasuja, Founder and CEO of PropEquity, explained, “The housing market is witnessing a correction after three years of record supply in 2021, 2022, and 2023. This oversupply has led to a decline in absorption and sales. Additionally, the rise in home prices and investor caution due to geopolitical concerns and certain weaknesses in the Indian economy have contributed to the slowdown. However, the market is still exhibiting strong demand, as shown by the healthy absorption-to-supply ratio, which stood at 131% in Q1 2025, slightly down from 132% in Q4 2024.”  Jasuja also highlighted that traditionally high-supply markets such as Hyderabad, Pune, and Thane have seen a sharp decline. These cities had been the top performers in terms of supply in 2022 and 2023, but now account for a significantly smaller portion of total launches, with their combined share dropping from 38% in Q1 2024 to just 29% in Q1 2025.  Despite the decline in sales and supply, the absorption-to-supply ratio remains robust, indicating that demand is still present, albeit at a reduced pace.  The table below shows the total absorption (or housing sales) in India's top cities for the first quarter of 2024 (Q1-2024), the fourth quarter of 2024 (Q4-2024), and the first quarter of 2025 (Q1-2025). It also compares the quarter-over-quarter (Q-o-Q) and year-over-year (Y-o-Y) changes in housing sales.  Key Highlights:

• Bengaluru stands out as the strongest performer, with a 10% increase in sales compared to the first quarter of 2024, marking a clear upward trend in the city’s real estate activity.
• Conversely, Hyderabad faces a sharp downturn, with a dramatic 47% decline in sales compared to Q1 2024, marking one of the steepest drops among the major cities.
• Across most of the cities, sales dropped both quarter-over-quarter and year-over-year, signaling a general slowdown in the market, especially in highly-supplied regions.
• Delhi NCR had a drastic drop compared to the previous quarter, but sales were up by 10% from the same quarter last year.