India Residential Market Dynamics-Q2 2025

India's residential property sector experienced considerable deceleration in H1 2025, marking a substantial departure from the robust post-COVID recovery. Transaction volumes totaled 134,776 units, constituting the first post-pandemic contraction in semi-annual sales with a 13% annual decrease. This decline reflects evolving consumer preferences, altered pricing mechanisms, and shifting macroeconomic factors. Despite H1 challenges, Q2 2025 exhibited stability through 69,530 deals, achieving 7% sequential improvement as most metropolitan areas excluding Bengaluru and Mumbai registered quarterly advancement.

Geographic concentration remained significant, with Bengaluru, Mumbai, and Pune jointly capturing 63% of H1 2025 transactions, solidifying their dominance as principal residential centers. Four leading metros individually exceeded 10,000-unit sales in Q2 2025. Chennai distinguished itself as the sole metropolis achieving 15% annual sales expansion during H1 2025, defying market conditions. Fresh project introductions represented 26% of semi-annual transactions, supported by established developers providing dependable completion schedules.

The residential marketplace demonstrated substantial upscaling, with properties valued at INR 10 million and beyond representing 62% of H1 2025 sales, increasing from 51% previously. This expansion resulted from 14% enhanced demand in the INR 30-50 million category, elevating market proportion from 8% to 10%. The INR 50+ million segment displayed 8% advancement year-over-year.

Conversely, affordable housing (below INR 10 million) reduced its footprint from 49% to 38% between H1 2024 and H1 2025, demonstrating luxury transaction prevalence. The INR 10-30 million range became the leading segment in Q2 2025, representing 46% of aggregate sales. Regional analysis revealed Bengaluru dominated INR 10-15 million, Mumbai excelled INR 15-30 million, and Pune controlled INR 5-7.5 million segments.

Despite reduced activity, excess inventory expansion slowed due to diminished project introductions, with surplus stock recording only 2.7% annual increase by Q2 2025.

H1 2025 documented 154,086 residential introductions, indicating 3% annual reduction and the first post-pandemic contraction in semi-annual launches. Escalating construction expenses reduced developer profitability, compelling project deferrals. However, Kolkata, Chennai, and Bengaluru achieved substantial advancement, with Bengaluru establishing its highest-ever semi-annual launch capacity at 19% growth.

Q2 2025 introductions reached 74,239 units, decreasing 7% sequentially. Technology centers—Bengaluru, Chennai, Hyderabad, and Pune—constituted 59% of launches, with Chennai establishing record quarterly capacity of 6,616 units.

Developer approaches shifted toward luxury categories, with INR 10+ million introductions soaring 110% annually in H1 2025. This advancement was accelerated by 35% supply growth in INR 10-30 million and 16% growth in INR 30-50 million segments, with luxury launches increasing from 62% to 70% of total introductions.

Residential appreciation continued throughout Q2 2025, with property values across seven cities maintaining upward trajectories. Annual increases spanned 5-17%, with Delhi NCR achieving maximum surge at 17%, followed by Bengaluru at 14%. Chennai and Kolkata experienced 11% price advancement. Strong uptake of quality launches reduced inventory, driving premium pricing strategies.

The residential sector narrowly dominated investment activity with 38% of institutional capital flow in H1 2025, though securing USD 1.2 billion represented a 27% annual decline. Bengaluru led with 33% market share, while Mumbai followed with 24%. Investment frameworks transitioned toward equity participation at 58%, demonstrating enhanced investor confidence. International funds prevailed with 65% share, exemplified by Blackstone's USD 214 million Kolte-Patil acquisition.

India's residential marketplace remains cautiously optimistic despite H1 deceleration. Elevated property valuations suggest potential price stabilization medium-term, encouraging sustained demand. Reduced interest rates and controlled inflation should strengthen markets by minimizing mortgage expenses and construction costs. Established developers will explore new territories while local players seek brand partnerships. Ongoing urbanization, infrastructure advancement, and rising consumer spending will maintain growth, with developers emphasizing luxury projects matching demand patterns through premium developments and technology-integrated residences.