Mr. Amit Masaldan, Chief Revenue Officer, Housing.com
India’s residential real estate market is currently undergoing a period of transition, marked by a nationwide slowdown but tempered by encouraging signs in select regions. As revealed by PropTiger.com’s latest Real Insight Residential Q1 2025 report, while overall housing sales declined 19% year-on-year during the January–March period, cities like Bengaluru and Chennai defied the broader trend, posting growth of 13% and 8% respectively. These contrasting performances underscore the localized nature of housing demand and highlight how strong economic fundamentals in specific markets continue to sustain buyer interest, offering a sense of cautious optimism amidst broader market adjustments.
RBI rate cut boosts buyer confidence
The timely intervention by the Reserve Bank of India, which implemented a 50 basis point rate cut during this calendar year, played a crucial role in supporting sales figures. Moreover, the sales decline could have been more pronounced without the rate cut announced by the Reserve Bank of India in February and April. This monetary policy adjustment has been particularly beneficial for urban Indians, the majority of whom rely on housing loans for property purchases, with the reduced repo rate directly influencing the interest paid on these credits.
New launches surge in select markets
New launch data further illuminates areas of market strength amid the overall correction. Bengaluru witnessed a remarkable 82% year on year increase in new project launches, while Kolkata saw an extraordinary 138% surge; the highest among the surveyed cities. Delhi NCR also demonstrated significant resilience with a 16% growth in new launches. These figures reflect sustained developer confidence in regions characterized by more stable demand patterns and suggest strategic adaptation to evolving market conditions rather than a widespread downturn.
Market correction driven by price appreciation and global concerns
The Q1 report indicates that the current market correction is primarily driven by two factors: the significant price appreciation seen over the past couple of years, which has impacted affordability, and growing geopolitical concerns that could potentially affect the domestic job market. However, the varied performance across different cities highlights that real estate remains fundamentally strong in areas where local economic drivers continue to create housing demand. Markets with robust IT and services sectors appear particularly well positioned to weather the current adjustment phase.
Future Outlook Remains Cautiously Optimistic
Looking ahead, the residential market may benefit from further monetary policy adjustments if inflation remains contained. The positive impact of February’s rate cut demonstrates how sensitive the housing market is to financing costs, suggesting that additional easing measures could further stimulate demand. Meanwhile, developers appear to be taking a measured approach, adjusting new supply to match current market conditions—a strategic move that should help prevent inventory overhang and support price stability in the medium term.
Opportunities Emerge for Strategic Homebuyers
For potential homebuyers, the current environment presents both challenges and opportunities. While general market sentiment has grown more cautious amid global uncertainties, the regional variations in performance suggest that carefully selected investments in growth corridors like Bengaluru and Chennai may still offer attractive prospects. The combination of moderating price growth, strategic project launches in high demand areas, and improved affordability through lower interest rates creates favorable conditions for end users and long term investors in select markets.
Conclusion
PropTiger.com’s Q1 2025 report paints a nuanced picture of a real estate market in flux—experiencing a broad-based correction, yet revealing clear signs of resilience in strategically important regions. The divergence in city-level performance highlights the critical role of local economic drivers in shaping real estate outcomes. At the same time, the positive influence of monetary policy interventions underscores the market’s sensitivity to financing conditions. As the sector adjusts to a new set of realities, the strength seen in select markets like Bengaluru, Chennai, and Kolkata offers a foundation for measured optimism. With developers recalibrating supply and buyers responding to improved affordability, the market appears to be entering a more balanced and strategic phase—one where challenges persist, but opportunities clearly remain for those who navigate thoughtfully.
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