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Following a decline during the pandemic, the Indian real estate market has been witnessing growth over the past two years. Along with commercial spaces, the housing sector has also been performing well. Of the total real estate investments in India in 2024, the residential sector attracted the maximum — 45%.
As we now approach the last quarter of 2025, it’s time to analyse whether the positive trend continued in the first half of this year, too, and whether the real estate market outlook for the coming year is bright, especially in the context of ongoing global unrest and national uncertainties such as the recent tariff hike imposed by the US.
A Mixed Bag
The upward trend in India’s residential property sector witnessed a reversal in the first half of 2025, marking a significant dip from the post-COVID growth. According to reports, semi-annual sales went down by 13% because of many factors. Anarock’s figures for the second quarter of this year show that the sales of residential properties in the country’s top seven cities dipped by an alarming 20%. One of the major reasons for this is, of course, the US tariff blow.
Suggested Read: Indian Real Estate Sector: Surge or Slump Post US Tariff Hike?
Quarter 3 figures aren’t optimistic either. As per studies, the sale of residential properties fell by 9% in the third quarter of 2025 (July-September), compared to the corresponding period in 2024.
However, the value of total sales went up by 14% in Q3, compared to the same period last year.
Talking about sales, Bengaluru, Pune, and Mumbai continued to shine with maximum transactions of residential properties in the first half of this year — together, they accounted for 63% of sales. Another impressive performance is that of Chennai, which is the sole Metro that marked a 15% hike in property sales.
While the sales may have dipped, the prices of residential properties continued to appreciate throughout the second quarter of this year. There was housing price growth in India, with property values in our seven major cities marking an increase. Delhi-NCR bagged the top spot with a growth of 17%, while Bengaluru followed with 14%. Kolkata and Chennai, too, experienced 11% price appreciation.
The figures may evoke mixed feelings, but it’s to be noted that in today’s volatile global scenario, India has emerged as one of the most robust housing markets in the world. Of the 55 markets studied in a survey, it stood 15th, beating bigwigs such as Australia, the UK, and even the US.
Luxury homes in vogue
Luxury homes play a significant role in boosting the country’s real estate market outlook. As per certain studies, the demand for luxury homes in the country, especially those priced at ₹4 crore and above, witnessed a 53% rise in sales across seven major cities in 2024. These cities are Bengaluru, Delhi-NCR, Mumbai, Hyderabad, Kolkata, Pune, and Chennai.
The picture is not different this year either, with sales of homes in the ₹1 crore-plus category remaining strong. They accounted for 62% of residential sales in the first half of this year. The most in-demand were homes priced between ₹1 crore and ₹3 crore; they led the second quarter of this year as well, constituting an impressive 46% of total sales.
City-specific statistics show the ₹1 crore-₹1.5 crore market leading in Bengaluru, while in Mumbai, the ₹1.5 crore-₹3 crore market has maximum demand. On the other hand, residential properties priced below ₹1 crore dipped from 49% to 38% between H1 2024 and H1 2025.
Affordable housing is also expected to witness a slump after the tariff hike affected medium and small enterprises, as most buyers of homes in this category are employed in such businesses.
Future: Bleak or bright?
True to the current times of uncertainties that the entire world is going through, for one reason or another, the real estate sector is also witnessing certain ups and downs. So, what does the future hold for the Indian real estate market? Will we get to see housing price growth in India?
Well, there seems to be scope for hope. According to an Investment Information and Credit Rating Agency (ICRA) report, India can expect a rise of six to nine per cent in the launch of new projects. Continuing with the hike in home prices this year, it may go up by another three to five per cent in FY2026.
On the whole, India’s residential property market shows a period of optimism in the coming months. Despite external factors, widespread infrastructure development, rapid urbanisation, and rising consumer spending may maintain our growth momentum.
FAQs
- What are some of the factors that affect real estate market trends? The real estate market is affected by multiple factors, including government policies, overall economic growth, fluctuating interest rates, infrastructure development, land costs, investor behaviour, and environmental factors, among others.
- Did Bangalore’s residential real estate market show an upward trend in Q2 2025?
- What are some of the reasons behind the rising demand for luxury homes in India?
It definitely seems so. According to a global index for the second quarter of this year, Bangalore is ranked fourth, having registered an impressive 10.2% annual increase in prime housing prices.
Some of the factors that have led to an increase in the demand for luxury homes include increasing disposable income, paucity of land in prime locations, influence of the pandemic on buyer behaviour, higher price appreciation, and increasing NRI investments.
Sources
JLL | JLL | JLL | Storyboard 18 | New Indian Express | Economic Times | IBEF | Housing | Business Today | CREDAI MCIH
