Indian Housing Market Finds Balance as Prices Stabilize in Key Cities

India’s Residential Real Estate Market Enters a New Phase of Stability

India’s residential real estate market is entering a new era of stability after years of rapid post-pandemic growth. According to the latest PropTiger Real Insight Residential Q1 2025 report, average housing prices across the Mumbai Metropolitan Region (MMR), Delhi-NCR, Chennai, and Pune remained unchanged during January–March 2025, reflecting a significant moderation in the pace of price appreciation.

A Market in Transition

While cities like Bengaluru and Hyderabad continued to see robust quarterly growth of 5%, with average prices reaching ₹7,881 and ₹7,412 per sq ft respectively, the four mature markets-MMR, NCR, Chennai, and Pune-held steady at ₹12,600, ₹8,106, ₹7,173, and ₹7,109 per sq ft. Ahmedabad and Kolkata registered more modest gains of 3.8% and 4%, signaling a trend of steady, but decelerating, growth.

“The moderation in price growth observed over the past few quarters indicates a stabilising market dynamic, likely encouraging the return of end-users previously displaced by speculative activity,” said Dhruv Agarwala, Group CEO, Housing.com & PropTiger.com.

Cooling, Not Crashing

This plateau in prices comes after a period of dramatic increases that had begun to impact affordability and sales. The shift became especially evident from Q3 2024 onwards, with most cities either holding steady or posting only low single-digit gains in Q1 2025. For example, Ahmedabad rebounded from a dip in Q4 2024 to register a 4% quarterly growth, while Kolkata also recovered after a previous decline.

Macro Drivers Behind the Shift

• End-User Dominance: More discerning buyers are returning, with genuine demand replacing speculative activity.
• Rationalized Investor Interest: Investors are now more focused on long-term value rather than short-term gains.
• Supply Adjustments: Developers are calibrating launches to reflect real demand, helping prevent overheating in the sector.

Sales and Supply Respond

Despite stable prices, the market is not without its challenges. Housing sales across India’s top eight cities fell by 19% year-on-year in Q1 2025, with less than 100,000 units sold, as buyers became more cautious amid global uncertainties and previous price spikes. New housing supply also dipped 10%, as developers responded to the shifting landscape.

A 25-basis-point repo rate cut by the Reserve Bank of India in February provided some relief, boosting buyer confidence in a market where most rely on housing loans for purchases.

City-wise Highlights

• MMR, NCR, Chennai, Pune: Price stability after previous surges, signaling a cooling market.
• Bengaluru & Hyderabad: Continued strong demand, 5% quarterly price growth.
• Ahmedabad & Kolkata: Modest but steady appreciation of 3.8% and 4%.

Looking Ahead: Sustainable Growth

Industry leaders believe this moderation is essential for sustainable growth. “This more measured trajectory is critical for sustaining end-user participation while maintaining the value built by investors and developers. In 2025, the market is expected to undergo further consolidation, reinforcing structural fundamentals and enabling steady, sustainable growth,” said Agarwala.

As developers recalibrate and buyers return, India’s housing market is poised for a period of consolidation, quality focus, and long-term stability.