A Mixed Year for Indian Housing: Declining Sales, Rising Prices, and Hope for Steady Growth Ahead

The year 2024 has been a rollercoaster for India's real estate market, marked by a slight dip in housing sales and a sharp rise in property prices. As India's top seven cities grapple with the effects of fluctuating demand, soaring prices, and election-induced slowdowns, the market finds itself at a crossroads. Despite challenges, the sector hints at resilience and growth potential for 2025.

The Numbers Tell the Story

In 2024, housing sales across the top seven Indian cities witnessed a 4% decline, dropping to 4.59 lakh units from 4.76 lakh in 2023, according to real estate consultancy ANAROCK. However, the overall sales value soared by an impressive 16%, reaching ₹5.68 lakh crore compared to ₹4.88 lakh crore the previous year.

Among these cities, the Mumbai Metropolitan Region (MMR) led with 1.55 lakh units sold, recording a marginal 1% increase. Bengaluru followed closely, reporting a 2% rise in sales. On the other hand, cities like Delhi NCR and Pune recorded a 6% drop, while Hyderabad, Chennai, and Kolkata saw declines of 5%, 11%, and 20%, respectively, with Kolkata facing the steepest fall.

Why Did Sales Decline?

Despite robust homebuyer demand, a mix of factors dampened the housing sector's growth. Rising property prices, coupled with the impact of general and state elections, created uncertainty. The election cycle also slowed project approvals, significantly affecting the supply of new homes.

Anuj Puri, Chairman of ANAROCK Group, noted, “2024 has been a mixed bag for the Indian housing sector. Elections and delayed project approvals inevitably slowed the momentum.”

A Dip in New Launches

Adding to the challenges, new housing project launches fell by 7%, dropping from 4.45 lakh units in 2023 to 4.12 lakh in 2024. Interestingly, Delhi NCR and Chennai bucked this trend, reporting a 44% and 4% increase in new launches, respectively. Meanwhile, other cities, including MMR, Kolkata, Pune, and Hyderabad, experienced significant declines of 15% to 28%.

Rising Prices Define 2024

Despite the drop in sales, housing prices surged across all seven cities, rising between 13% and 30%. Delhi NCR saw the steepest increase, with average prices jumping from ₹5,800 per sq ft in 2023 to ₹7,550 per sq ft in 2024—a staggering 30% growth.

Overall, the average price across the top cities climbed 21% to ₹8,590 per sq ft, driven by increased input costs and strong demand. This unprecedented rise underscores the sector's resilience amidst challenges.

A Look Ahead to 2025

Looking to the future, experts believe 2025 will offer steadier growth. Anuj Puri remarked, “2025 is unlikely to replicate the steep price hikes of 2024. Instead, the market will stabilize, driven by steady demand and new supply infusions from listed developers.”

As project approvals pick up and election uncertainties fade, the housing market is expected to recalibrate. Developers are gearing up for new supply pipelines, aiming to meet the robust demand while navigating input cost challenges.

Key Takeaways

• Housing sales in India’s top seven cities declined by 4% in 2024.
• Kolkata recorded the sharpest decline in sales at 20%.
• Average housing prices across the top cities surged by 21%.
• New project launches fell by 7%, except in Delhi NCR and Chennai.
• Experts predict steadier growth and stabilized prices for 2025.