The Indian real estate market experienced a challenging second quarter in 2025, with sales plummeting by 20% across seven major cities, according to a report by Anarock. The drop in demand reflects the ongoing economic uncertainty, exacerbated by geopolitical tensions and the rising cost of property prices. However, amidst the decline, Chennai emerged as a notable exception, with a surprising 11% year-on-year increase in housing sales. This article takes a deep dive into the key factors influencing the market and explores how certain cities, like Chennai, are continuing to show resilience.
Q2 2025: A Tumultuous Quarter for Housing Sales
The April to June period of 2025 saw a significant downturn in housing sales across major Indian cities. The total number of housing units sold dropped to 96,285 units from 1,20,335 units in the same quarter last year, reflecting a sharp decline of 20%. The cities affected by this downturn include Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru, Hyderabad, Pune, and Kolkata.
Chennai: A Bright Spot Amid the Decline
In contrast to other cities, Chennai saw an impressive 11% rise in housing sales during Q2 2025, with approximately 5,660 units sold, up from 5,100 in the same period last year. On a quarterly basis, the city also experienced a remarkable 40% jump in sales, signaling a positive trend in the local market.
Factors Behind the Decline in Housing Sales
The drop in housing sales across major cities can be attributed to several factors, including:
- Geopolitical Tensions: The ongoing “war-like” climate, both domestically and internationally, caused a sense of uncertainty among potential buyers, pushing them into a “wait-and-watch” mode.
- Rising Property Prices: Over the past two years, property prices have surged, making homes increasingly unaffordable for many buyers.
- Rising Home Loan Rates: Though home loan rates have started to soften, the increase in rates over the last few years still had a dampening effect on buyer sentiment.
However, experts believe that the situation is starting to improve, with domestic tensions easing and the Reserve Bank of India (RBI) cutting the repo rate, injecting optimism into the market.
Price Trends and Market Segmentation
Across major cities, new housing supply is increasingly dominated by luxury and ultra-luxury properties priced above ₹1.5 crore, which now account for 46% of new launches. The affordable housing segment, in contrast, comprises just 12% of the new supply. This shift in focus towards higher-end properties has been attributed to increasing demand in these segments despite a general decline in overall sales.
Residential prices across top cities rose by an average of 11% year-on-year, with NCR leading the pack at a 27% surge. Bengaluru followed closely with a 12% increase, while Hyderabad saw a growth of 11%. On a quarterly basis, however, the price growth moderated to just 1%.
New Housing Launches in Q2 2025
The volume of new housing launches across major cities saw a significant decline in Q2 2025, falling by 16% compared to the same period in 2024. Key cities like MMR, NCR, Pune, and Bengaluru saw the most new launches, accounting for 78% of the total new supply.
- MMR: Approximately 28,165 units were launched, a 36% decrease year-on-year.
- NCR: New launches surged by 69% compared to Q1 2025, driven primarily by luxury segment developments.
- Bengaluru: The city saw a 4% decline in new launches, with the majority of new supply in the premium and luxury segment.
Summary Table: Key Highlights
| Key Metric | Q2 2025 | Q2 2024 | YoY Change |
|---|---|---|---|
| Total Housing Sales (Units) | 96,285 | 1,20,335 | -20% |
| Chennai Housing Sales (Units) | 5,660 | 5,100 | +11% |
| New Housing Supply (Units) | 98,625 | 1,17,165 | -16% |
| Luxury Housing Share of New Supply | 46% | N/A | N/A |
| Residential Price Growth (YoY) | 11% | N/A | N/A |
Expert Opinions on Market Outlook
Anuj Puri, Chairman of Anarock Group, commented on the market trends:
“Despite the 20% year-on-year dip in sales, we are witnessing a 3% uptick this quarter, signaling a rebound in sentiment. Home loan rates are softening, and developers are largely holding prices steady, which could lead to an upswing in sales in the coming quarters.”
He further emphasized:
“NCR, with its 27% rise in prices, and Bengaluru with a 12% rise, are showing robust momentum. If prices stabilize, we expect a potential acceleration in housing sales across major cities.”
FAQs (Frequently Asked Questions)
Q1: Why did housing sales decline in Q2 2025 across major cities?
A1: Housing sales in Q2 2025 saw a significant decline due to factors like geopolitical instability, rising property prices, and high home loan rates, which dampened buyer sentiment.
Q2: Which city defied the trend and showed growth in housing sales?
A2: Chennai was the only city that saw an 11% rise in housing sales, with a significant 40% increase in sales compared to the previous quarter.
Q3: What has caused the rise in property prices across major cities?
A3: Property prices have surged due to strong demand in the luxury and ultra-luxury segments, combined with limited supply in the affordable housing sector.
Q4: What are the predictions for the real estate market in the coming quarters?
A4: Experts predict that the market could rebound in the coming months, especially with softening home loan rates and steady pricing from developers, which may encourage more buyers to enter the market.
Q5: How has the luxury housing segment performed in Q2 2025?
A5: The luxury housing segment, particularly those priced above ₹1.5 crore, continues to dominate new launches, accounting for 46% of the overall new supply in Q2 2025.