Housing sales drop 20% in Q2 despite value gains, premium demand holds firm

Home sales across major cities in India declined in Q2 2025, but value rises 1% to ₹1.47 trillion amid a sharp shift toward high-end and luxury housing, says Anarock's residential market report

India’s housing market took a hit in the second quarter of the calendar year, with home sales across the top seven cities dropping 20 per cent year-on-year (Y-o-Y), Anarock's Pan India Residential Market report for Q2 2025 showed. Despite that, overall sales value edged up by 1 per cent to ₹1.47 trillion — a clear sign that buyers are leaning toward fewer but higher-value homes.

 

While the number of units sold declined to 96,300 across the top seven cities, sustained appetite for luxury homes kept average ticket sizes strong, reinforcing the premiumisation trend now defining the sector.

 

Home prices rise

Average home prices across major cities climbed 11 per cent to ₹8,990 per sq ft, driven by a 27 per cent spike in Delhi-NCR and 12 per cent in Bengaluru. While repo rate cuts offered some relief, affordability remains a growing concern, particularly for middle-income buyers.

 

Housing launches decline, but outpace Covid-19

New project launches fell 16 per cent from the same quarter last year, totalling 98,600 units. That’s also a slight 1 per cent dip compared to Q1 2025. Still, supply remains 64 per cent higher than pre-pandemic levels, showing underlying strength in the market, the report said.

 

Mumbai Metropolitan Region (MMR), Bengaluru, Pune, and NCR led with 78 per cent of total launches.

 

Chennai outperformed with a 79 per cent sequential and 63 per cent annual surge in fresh supply — the strongest growth among metros.

 

City sales: Chennai surges, MMR and Pune slip

Chennai was the only major market to post annual sales growth, rising 13 per cent Y-o-Y and 40 per cent over the previous quarter. NCR and Hyderabad also saw quarterly gains of 14 per cent and 9 per cent, respectively. In contrast, sales in MMR and Pune — traditionally strong performers — fell sharply by 25 per cent and 27 per cent, respectively.

 

Despite the volume drop, value remained steady thanks to rising prices and a shift toward more expensive homes. If demand stays focused on premium categories, this trend is likely to continue.

 

Luxury housing: Highest launches

Luxury housing (₹1.5–₹2.5 crore) accounted for 27 per cent of all new launches, the largest share among segments. High-end (₹80 lakh–₹1.5 crore) and mid-end (₹40–₹80 lakh) followed with 21 per cent each. Meanwhile, affordable housing (<₹40 lakh) slipped to just 12 per cent of new supply.

 

Developers in Hyderabad and Bengaluru ramped up the ultra-luxury supply, while MMR saw a rare uptick in affordable launches. Overall, though, developers across India continued shifting toward high-margin projects.

 

Lesser unsold units

Unsold inventory fell 3 per cent Y-o-Y to 562,000 units. Pune led with a 15 per cent drop, followed by MMR at 9 per cent. Conversely, Bengaluru saw a 30 per cent spike, reflecting a mismatch between launches and absorption.

 

High-end homes now make up 30 per cent of all unsold inventory, while the ultra-luxury segment accounts for 10 per cent, raising red flags around oversupply in pockets like NCR.

 

Recovery expected in H2 2025

The second half of the year could bring a recovery, helped by falling interest rates, faster project approvals, and the traditional festive-season boost. Developers are optimistic, projecting a 21 per cent rise in pre-sales for FY26, fueled by better execution and capital inflows.

 

Land buying has already crossed ₹30,885 crore in the first half, 1.05 times the total for all of 2024. With developers becoming more selective, the focus now is on balancing luxury offerings with affordability.