India's housing market is not crashing, but definately cooling. Here is why

After a period of rapid post-pandemic expansion, the market now appears to be entering a phase of cautious consolidation.

 India's residential property market is transitioning from a phase of rapid post-pandemic growth to a more balanced and sustainable trajectory. While prices continue to rise year-on-year, the pace of growth has moderated in recent quarters, indicating a shift towards cautious consolidation, said a report by PropTiger,  a transaction and advisory services platform.

 

Cities like Bengaluru and Hyderabad have led the charge with 5% quarterly increases in Q1 2025, bringing Bengaluru's average price to Rs 7,881 per square foot and Hyderabad's to Rs 7,412 per square foot. In contrast, mature markets such as Delhi NCR, MMR, Pune, and Chennai have experienced price stability, with no quarterly change in average prices, suggesting a plateauing effect.

 

Other markets like Ahmedabad and Kolkata also saw moderate increases of 3.8% and 4% respectively in Q1 2025, reinforcing the trend of steady—though decelerating—growth.

 

“The moderation in price growth observed over the past few quarters indicates a stabilising market dynamic, likely encouraging the return of end-users previously displaced by speculative activity,” said Mr. Dhruv Agarwala, Group CEO, Housing.com & PropTiger.com. “This more measured trajectory is critical for sustaining end-user participation while maintaining the value built by investors and developers. In 2025, the market is expected to undergo further consolidation, reinforcing structural fundamentals and enabling steady, sustainable growth.”

 

Market Cooling, Not Crashing

 

The shift toward moderation became particularly evident from Q3 2024 onwards. Between Q4 2024 and Q1 2025, most cities either held steady or posted low single-digit gains. For example:

 

Ahmedabad rebounded from a dip in Q4 2024 to register a 4% QoQ growth.

 

Kolkata also recovered after a 4% decline last quarter, with a 4% rise.

 

Pune remained flat at  Rs 7,109/sqft, reflecting stability after strong gains in 2023.

 

Even in high-growth areas like Delhi NCR, which saw double-digit gains through much of 2023, Q1 2025 showed 0% quarterly growth, indicating a market that is pausing after a sharp upswing. 

 

Macro Drivers Behind Consolidation

 

The stabilisation phase can be attributed to multiple factors:

 

A more discerning buyer base dominated by end-users

 

Continued but rationalised investor interest

 

A supply pipeline adjusting to real demand rather than speculative pushes  "With prices plateauing in many cities and rising modestly in others, developers are likely to respond with more calibrated launches. This, in turn, will help maintain momentum while avoiding overheating in the sector," noted the report.