India’s top eight residential property markets recorded an 18% year-over-year increase in housing sales in financial year 2024-25, selling over 500,000 units despite a decline in new project launches, according to real estate research firm Liases Foras, as reported by The Economic Times.
New launches dropped by 8% during the fiscal year, totaling approximately 430,000 units. The slowdown reflects a more cautious stance from developers after four consecutive years of strong sales growth. However, the firm noted that the reduction in supply has not impacted market stability, as unsold inventory remained steady at around 800,000 units.
The overall inventory overhang stood at 19 months, a level considered healthy for the sector. This suggests that current inventory is sufficient to meet demand without creating pressure for price cuts. Average residential property prices rose 3.7% during the year, supported by limited new supply and consistent demand.
According to the report, the risk of a price correction is low due to the balance between supply and demand. Instead, a period of moderate price appreciation is expected.
The outlook varies across cities. The Mumbai Metropolitan Region (MMR), Pune, and Hyderabad may experience some market cooling. In contrast, the National Capital Region (NCR), Bengaluru, and Chennai are projected to continue growing, supported by strong buyer activity.
Adding to market resilience, property registrations in Mumbai have remained stable, which has further reinforced buyer and developer confidence.
Liases Foras also highlighted that the recent dip in supply should not be viewed as a negative indicator. The available inventory is sufficient to support current demand levels, contributing to efficient and stable market conditions.
However, the firm cautioned that the housing market has shown signs of plateauing in the last two quarters due to the slowdown in new launches. This follows nearly four years of a sustained growth rally.
Looking ahead, the luxury and ultra-luxury segments are expected to witness moderation. Meanwhile, early signs of expansion are emerging in the affordable and mid-income segments. If interest rates decline, affordability is expected to improve, potentially boosting demand in both Tier I and Tier II cities.