Housing Market Show Signs of Recovery with 3% Quarterly Growth in Q2 2025, Despite 20% YoY Decline

India's housing market is showing early signs of recovery with a 3% increase in home sales in Q2 2025 compared to the previous quarter, according to a new report by real estate consultancy ANAROCK. However, sales are still down 20% compared to the same period last year, largely due to rising property prices and global tensions such as the Iran-Israel conflict and Operation Sindoor.

"Despite a 20% year-on-year dip in sales across the top 7 cities, a 3% uptick this quarter signals renewed momentum. With home loan rates softening and developers largely holding prices steady, the stage is set for a potential upswing in housing sales in the coming quarters," said Anuj Puri, Chairman, ANAROCK Group.

Housing Sales:

Around 96,285 homes were sold across the top 7 cities this quarter, compared to over 1.2 lakh units in Q2 2024. Mumbai Metropolitan Region (MMR) and Pune together made up nearly half of all sales with with approx. 46,685 units sold cumulatively in these cities in Q2 2025.

Chennai stood out as the only city to show a yearly increase in housing sales - up 11% YoY in the quarter against Q2 2024 - from approx. 5,100 units in Q2 2024 to approx. 5,660 units in Q2 2025. Q-o-Q, Chennai saw sales jump by 40% - approx. 4,050 units were sold in the city in Q1 2025.

"The second quarter of 2025 was a rollercoaster for the Indian housing market, rocked by major military actions at home and abroad. The war-like climate pushed homebuyers into wait-and-watch mode, compounding the impact of soaring property prices over the past two years. Now, with domestic tensions easing and the RBI's repo rate cut injecting fresh optimism, buyer sentiment is rebounding," said Anuj Puri, Chairman of ANAROCK Group.

New Launches:

New housing project launches dropped 16% year-on-year from approx. 1,17,165 units in Q2 2024 to about 98,625 units in Q2 2025. MMR and NCR (Delhi region) led in new supply, together accounting for nearly half of the launches. NCR saw a strong 69% Q-o-Q jump in new supply in Q2 2025 compared to Q1 2025, driven by high-end and luxury projects.

In MMR, new housing project launches dropped by 36% compared to last year, with over 59% of the new homes priced under Rs 80 lakh. In contrast, the NCR saw a strong focus on high-end housing, with 82% of new launches in the luxury segment, priced above Rs 1.5 crore.

Chennai recorded a 79% increase in new supply compared to the previous quarter, with 79% of the homes falling in the mid-to-premium price range. Cities like Bengaluru, Pune, Hyderabad, and Kolkata showed mixed trends, but most of the new homes launched were in the premium or luxury categories.

Average Price Movement:

Average residential prices rose by a meagre 1% quarterly, but the annual rise has been 11% in the top 7 cities. The annual growth rate has certainly seen a downward trend in the quarter.

"NCR led the recorded the sharpest increase Q2 2025 with a striking 27% year-on-year surge and a 4% quarterly rise in residential prices," said Anuj Puri. "Bengaluru followed with a robust 12% annual jump, underscoring strong momentum in key markets. If prices remain in check, expect housing sales across major cities to accelerate in the coming quarters," he added.

Unsold Inventory:

Unsold inventory across the top 7 cities saw a marginal quarterly increase in the quarter - to approx. 5.62 lakh units by Q2 2025-end against approx. 5.60 lakh units in Q1 2025. Annually, unsold inventory decreased by 3% across the top 7 cities, with Pune witnessing the highest yearly decline of 15% - from approx. 94,770 units by Q2 2024-end to approx. 80,240 units by Q2 2025-end.