India Residential Market Dynamics-Q1 2025

The first quarter of 2025 saw residential sales reach 65,246 units, reflecting only a 12% year-on-year decline despite continuing weakness in the sub-10 million housing segment. This resilience can be attributed to robust growth in premium housing, with properties priced above INR 10 million seeing a 10% year-on-year increase. Particularly strong performance came from the INR 15-30 million segment (22% growth) and the INR 30-50 million segment (26% growth), which helped offset the slowdown in demand for more affordable housing categories. The trend indicates a significant market pivot toward high-end residential properties, with premium and luxury segments gaining momentum as property values continue to appreciate substantially across major Indian urban markets.

Housing sales across India's top seven cities remained heavily concentrated in Bengaluru, Mumbai, and Pune during Q1 2025, with these three cities capturing approximately 66% of the total 65,246 units sold. Despite overall sales declining by 11% compared to the previous quarter, a notable trend has emerged where newly launched projects are significantly driving quarterly sales figures. In Q1 2025, about one-quarter of all housing sales came from developments launched within that same three-month period. This pattern reflects growing consumer preference for projects by established developers who offer reliable construction timelines and potential for investment appreciation.

The residential real estate market is showing signs of a shift in buyer preferences with lowering demand for less than INR 10 million housing and a growing affinity for high value homes. This upswing in the higher-priced segment demand has shielded the overall housing sales from a sharper decline. While sales of apartments priced under INR 10 million have dropped by around 32% compared to Q1 2024, housing segment priced at INR 10 million and above has seen a growth of about 10% during the same period.

Consumers displayed an increased willingness to purchase high value homes, catalyzing a substantial shift in market dynamics. Analysis of the top seven urban markets reveals that properties in the INR 15-30 million range dominated quarterly transactions, accounting for approximately 24% of all sales. Several factors fueled this premium housing demand: growth in affluent population segments, higher disposable incomes, evolving preferences for spacious living environments, and desire for technologically sophisticated, future-ready residences. Delhi NCR particularly exemplified this premium market transition, with 59% of its quarterly sales occurring in the INR 30 million-plus category, supported by around 75% of new project launches targeting this premium segment during Q1 2025.

Q1 2025 set a first-quarter record for residential launches while ranking as the fourth-highest quarterly total ever with 79,847 new units, up 8% from the previous quarter. Bengaluru reached an all-time quarterly high, growing 62% year-over-year. Developers have pivoted their strategies toward premium offerings, with 44% of Q1 launches priced above INR 15 million.

Housing prices across India's seven major cities maintained their upward momentum in Q1 2025, rising 6-18% year-over-year. Delhi NCR topped the list with an 18% increase, while Bengaluru saw a 13% jump. Rapid absorption of quality inventory has created scarcity, driving prices higher. Developers are further accelerating this trend by launching new phases of existing projects at premium rates.

Future housing demand will be fueled by increasing urbanization, infrastructure improvements, premium home preferences, higher disposable incomes, and falling home loan interest rates. Supply growth will maintain momentum through robust buyer engagement, quality developments in prime locations from established builders, sustained demand in mid-segment and premium housing, and strategic partnerships between local and nationally recognized developers. Consequently, residential property values are expected to continue rising due to strong demand meeting limited availability in sought-after projects.