Home sales down 1% in 2025, launches down 3%, but observers see momentum steady

Home prices continued to rise in every major housing market

• Residential sales in 2025 fell 1 percent after four years of growth
• Affordable housing sales stayed weak, but premium and luxury segments grew
• Home prices rose in all major markets despite lower sales and fewer new launches

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Residential sales in 2025 declined by 1 percent in 2025, after four straight years of growth, amid concerns in the market about the real estate cycle turning negative over the past year. A report from Knight Frank India shows that 3,48,207 homes were sold across the top eight markets in India for the year, down from 3,50,612 units in 2024.

Experts, however, noted that while the current sales figures have cast doubts among investors and observers about the sector's future, the situation remains steady, with no major upheaval expected soon. Sales in the affordable category continued to be weak, and sales momentum in premium and luxury segments continued to grow, as has been the trend since the COVID-19 pandemic.

"Even as sales are lower this year, the situation is not yet raising concern. Looking ahead, we do not see a sharp fall or decline in real estate sales," said Gulam Zia, senior executive director at Knight Frank India, addressing a press briefing.

Shishir Baijal, Knight Frank India's chairman and managing director, added that Grade-A developers, who cater to premium price points, continue to perform well. He added that the sluggishness of sales in the affordable category (priced less than Rs 50 lakh) may be related to the quality of the products on offer.

The National Capital Region saw a significant decline in sales- 9 percent- while sales in Mumbai, India's largest housing market, were largely flat, as was the case in Bengaluru.

Launches down

Data from Knight Frank India also noted that launch activity across the top eight markets declined by 3 percent to 3,62,184 units for the year. Unsold inventory also rose slightly during the year to 5,09,815 units. Home prices in all major markets grew during the year, despite the decline in sales, with prices in NCR growing by a significant 19 percent. In Mumbai, prices grew by a moderate 7 percent, while in Bengaluru and Hyderabad, homes were dearer by 12 percent and 13 percent respectively.

Launches in NCR were down 16 percent, while in Mumbai, it was down by 10 percent. Bengaluru and Chennai were the only major markets where residential launches rose, by 23 percent and 20 percent respectively.

Market observers said that the decline in launches may also be related to supply-side constraints, rather than demand issues.

"India’s residential project launches have declined year-on-year, driven largely by supply-side constraints rather than a demand slowdown. Developers are contending with elevated land and construction costs, a visible slowdown in equity funding, and stricter compliance norms for debt raising, all of which have tightened project feasibility and delayed new starts," said Pawan Agarwal, MD of NK Realtors, a large broker in eastern India.

Also slowing down projects are regulatory approval timelines, developers added, with many projects over the last year delayed due to a key Supreme Court case related to the Union government's remit over eco-sensitive zones.

"...Approvals in many cities are taking longer. This delays the pipeline even as demand is robust. This is temporary and current mismatch between high absorption and slower new supply will keep prices stable for the next 12–18 months," said Haresh Kishor, MD of KG Developers.

However, the quarters-to-sell, defined as the time required to sell existing inventory at ongoing sales run rates with no new stock being added, remained constant at 5.8 quarters, signifying a largely healthy market, said Ankita Sood, national director of research at Knight Frank India.