Southern India leads H1 2025 housing sales, outpacing NCR in unit sales

Southern India leads H1 2025 housing sales, outpacing NCR in unit sales

Southern India led the nation’s housing market in H1 2025, with Bengaluru, Hyderabad, and Chennai topping sales volumes. Backed by IT, life sciences, manufacturing, and proactive policies, the three cities together logged over Rs 1.18 lakh crore in sales, outpacing the National Capital Region's (NCR) unit sales despite its luxury-driven value lead.

Ram Chandnani, Managing Director – Leasing, CBRE India, said: “Southern India is not only mirroring the region’s economic strength, it is architecting the future of India’s real estate landscape. The convergence of high-quality infrastructure, proactive governance, and a deep talent pool has turned cities like Bengaluru, Hyderabad, and Chennai into global investment attractions.”

According to the CREDAI-CRE Matrix India Housing Report for H1 CY25, the Southern metros collectively sold more units and recorded a broader spread of demand across price categories than the NCR, which covers Delhi and adjoining districts in Haryana, Uttar Pradesh, and Rajasthan.

While NCR led in value terms, this was largely due to its high concentration of luxury sales. In contrast, the South’s growth was driven by a healthier balance of mid- and high-value segments, coupled with a surge in new launches. Together, Bengaluru, Chennai, and Hyderabad accounted for over Rs 1.18 lakh crore in sales value and more than 72,000 units in H1 2025, exceeding NCR’s unit sales volume.

Bengaluru sold around 30,842 units worth Rs 49,776 crore, a 4% rise in value. Chennai saw 11,395 units worth Rs 12,533 crore sold, registering 23% growth. Hyderabad recorded 30,553 units worth Rs 56,345 crore, with a 2% growth in value.

Meanwhile, NCR recorded the largest share of sales value at about Rs 91,813 crore, growing 21% year-on-year, with luxury homes of Rs 3 crore and above making up 73% of sales. CREDAI noted that this “disparity between revenue and volume growth suggests a significant rise in average ticket size,” with NCR’s average reaching Rs 3.66 crore.

Gaurav Kumar, Managing Director, Capital Markets & Land, CBRE India, said: “The Southern India region is diversifying across sectors, from Grade A office and data centres to high-value life sciences, advanced manufacturing, and warehousing. This shift is being driven by both global capital inflows and domestic occupier demand, reinforced by state-level reforms and infrastructure expansion.”

Average ticket sizes rose across the southern metros — Bengaluru up 17%, Chennai up 12%, and Hyderabad up 14% — while NCR saw a 32% increase. The CREDAI–CRE Matrix report highlighted that Bengaluru and Chennai also led in new launches, increasing from about 33,000 units in H1 CY24 to around 39,000 units in H1 CY25 and from about 14,000 units in H1 CY24 to around 19,000 units in H1 CY25 respectively, at a time when NCR’s launch numbers remained largely flat.

Abhishek Kiran Gupta, CEO and Co-Founder of CRE Matrix, said: “While NCR’s sales value is driven by its dominance in the luxury housing segment, Southern cities are showing resilience with steady absorption across varied ticket sizes and continued growth in unit launches."

Key Drivers of Southern Growth

The region’s growth is supported by a diversified economic base, including IT/ITeS, electronics manufacturing, life sciences, tourism, and advanced manufacturing in electric vehicles, aerospace, and semiconductors. Karnataka has pushed development in Tier-II cities like Mysuru and Hubballi; Tamil Nadu is expanding its electric vehicle and electronics manufacturing base; Telangana is growing its life sciences corridor; and Andhra Pradesh and Kerala are building capacity in tourism and IT services.

CREDAI President Shekhar G Patel noted in the report that sustained demand from end-users, coupled with state-led infrastructure upgrades, has made Southern markets less volatile and more resilient than their northern counterparts.

Further, office leasing activity has also been robust in Southern metros, with Bengaluru, Chennai, and Hyderabad. According to ICRA, Bengaluru holds the largest share of Grade A office stock at 26% of the total across the top six cities, and is projected to see vacancy levels decline from 9.8% to between 9.0% and 9.5% in FY2026, despite 16.5 million square feet of new supply.

Chennai is expected to maintain a similarly low vacancy rate of 9.0–9.5% with 5 million square feet of additions. Hyderabad is forecast to remain steady at around 17.5–18.0% vacancy, supported by 15.5 million square feet of fresh supply.

Analysts note that this strong commercial absorption is reinforcing residential demand, as sustained job creation in these cities fuels home buying.

Abhishek Lahoti, Assistant Vice President and Sector Head, Corporate Ratings, ICRA, said: “The slowdown in leasing from global IT firms has been compensated handsomely by the GCCs and the BFSI segments, which ICRA expects will continue to dominate leasing activity, accounting for the majority of the space uptake in FY2026.”

The agency noted that net absorption in FY2025 reached a record 65 million square feet, a 14% year-on-year increase, and that the momentum had carried into the first quarter of FY2026, with Southern cities remaining key contributors to overall demand.

Looking ahead, CREDAI’s report observes that the South’s combination of economic diversity, robust infrastructure pipeline, and strong end-user base positions it to sustain its lead over other regions in the coming years, both in residential and commercial real estate. With both residential sales and commercial absorption hitting record highs, Southern metros are expected to remain India’s primary growth engine through 2026.