Dhruv Agarwala, Group CEO, Housing.com & PropTiger.com, says property prices have gone ahead of themselves.
Prices in the National Capital Region (NCR) rose over 50 percent last year, and other markets have seen high double-digit increases, Agarwala told Moneycontrol in an interview.
Unlike previous years, 2025 will not be a record sales year as it will likely be a year of consolidation, Agarwala said.
Housing.com is a real-estate app for property search, and PropTiger.com is a digital real estate transaction and advisory platform. Both these platforms are owned by REA India.
'Correction already happening'
Residential real estate market will cool off, he said, hinting at a smooth and healthy correction that may slightly stabilise prices.
Rising prices make buyers wait, they hope for a fall in prices and developers may slow launches, if demand stays weak.
“When prices climb too fast, end-users are priced out, leaving mostly investors and speculators, which isn’t healthy for the market. A cooling market could stabilise prices and bring end users back. A course correction is already happening. The question is whether it will persist or flatten. Stability isn’t bad as it strengthens the market by bringing back end users,” he said.
Also Read: Housing sales drop by 26% in eight cities in Q42024; Delhi-NCR sees uptick
Housing sales drop 26%
Housing sales across the country’s top eight cities dropped by 26 percent year on year (YoY) in the October-December 2024 quarter, compared to the corresponding quarter in the last calendar year.
These eight cities are Delhi-NCR, Mumbai, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad and Kolkata.
However, sales grew by around 10 percent on a quarter on quarter (QoQ) basis, thanks to the festival season, according to a report by PropTiger.com.
“Year 2025 is expected to be a year of consolidation, not record sales. A smooth correction is healthy. Cooling of the market is good as it prevents crashes, which take years to recover from,” Agarwala told Moneycontrol.
Second home market booming
Agarwala said that the second home or holiday home market is strong and has good demand. He said that be it beach destinations like Goa or hill stations such as Kasauli, Rishikesh, buyers are preferring them for the second home market.
Limited supply in the segment and better infrastructure are pushing prices up. Millennials, unlike older generations, buy second homes for status or investment, he said.
“People now value lifestyle, even if the property isn’t beachfront or villa-sized. Remote work and high rental yields are driving demand for second or holiday home market. Buyers want triple benefits: rental income, capital appreciation, and personal use. Demand now spans from villas to apartments,” he said.
He said that connectivity improvements and Airbnb rentals fuel the trend and supply constraints and have boosted prices in Goa and hill stations.
The Housing.com CEO also said that the demand is also growing for second homes near pilgrimage destinations like Vrindavan.
“Families want homes for extended stays. Senior-living projects near these areas could do well if tailored to residents’ needs,” he added.
Luxury segment remains resilient
Agarwala said that the definition of luxury houses has changed from Rs 1-1.5 crore to Rs 5-6 crore and above now.
“This (luxury) segment remains resilient. Wealth from IPOs, stock markets, and business success drives the demand in this segment. Even struggling markets see super-premium projects like DLF’s in Gurugram sell out,” he said.
“Luxury isn’t slowing unless a global crisis hits. COVID was an anomaly. Growth trends protect this segment, so expecting price drops at the high end is unrealistic,” he added.
REA India reported a 46 percent growth in its consolidated revenue to Rs 356.6 crore in July-December 2024 period.
The company’s EBITDA (Earnings before interest, taxes, depreciation and amortisation) loss has also reduced to Rs 74.2 crore between July and December 2024 .
Housing.com added seven new Tier-II cities in the July-December 2024 period, taking the total number of Tier-II cities it operates in to 20. The new cities include Kochi, Patna, Dehradun, Guwahati, Raipur, Surat and Varanasi.
Housing.com operates in 28 cities across India, including eight Tier-I cities.
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