Housing Price Growth Slows to 6%: Big Change in Property Market

The Indian housing market reached a phase of normalization in 2025 as average residential price growth slowed to 6%, a sharp deceleration from the 17% surge witnessed in 2024. Despite this broader cooling, southern powerhouses like Bengaluru and Hyderabad defied the trend with robust growth of 13% and 8% respectively, driven by steady end-user demand. This transition marks a shift toward a more disciplined, supply-calibrated market where developers are prioritizing price integrity over high-volume liquidation as we move into 2026.

Latest Update

• Residential property sales across India’s top 8 prime markets stabilized at 3,86,365 units in 2025, marking the lowest annual sales volume since 2022.
• Total new housing supply saw a measured decline of 6% to 3,61,096 units, indicating that developers are carefully managing inventory to prevent oversupply.
• Bengaluru has officially overtaken Delhi NCR as the second most expensive housing market in India, with property rates reaching an average of ₹9,500 per sq. ft.
• Unsold inventory levels remain within comfortable limits across major metros, though high-ticket luxury categories are seeing longer decision cycles among buyers.

Why did housing price growth slow down in 2025?

Housing price growth slowed to 6% in 2025 because the Indian real estate market entered a period of healthy normalization following the explosive, post-pandemic catch-up growth of 2024. In the previous year, prices skyrocketed by 17% as pent up demand and rising material costs forced a rapid upward adjustment. In 2025, the market moved toward a “disciplined” phase where price increments became more measured, aligning more closely with long-term sustainable averages rather than short-term speculation.

This cooling effect was also influenced by a 12% decline in annual residential sales, as buyers became more selective amid rising interest rates and high entry costs in premium micro markets. While cities like Mumbai and Pune saw significant sales drops of 26% and 27%, developers largely avoided aggressive discounting. This collective strategy helped maintain “price integrity,” ensuring that while growth slowed, the underlying value of residential assets remained resilient throughout the top 8 cities.

How are Bengaluru and Hyderabad defying the national cooling trend?

Bengaluru and Hyderabad are defying the national trend, with double-digit or high single-digit price growth driven by sustained end-user demand from the technology and pharmaceutical sectors. Bengaluru recorded a 13% average price jump in 2025, with its average rate climbing to ₹9,500 per sq. ft. in the final quarter. This momentum is supported by the massive growth of Global Capability Centres (GCCs), which continue to attract a high-earning workforce that views homeownership as a primary stability goal.

Hyderabad similarly outperformed the broader market with an 8% growth rate, compared to just 3% in 2024. The city’s expansion is focused on specific corridors like Gachibowli and HITEC City, where infrastructure development has kept buyer interest high. Unlike northern markets that saw a massive spike and subsequent cool off, these southern markets represent a balanced absorption where supply and demand remain tightly synchronized, preventing the “inventory overhang” seen in other regions.

City-wise Housing Price Growth: 2024 vs 2025

What does the decline in residential sales mean for 2026 buyers?

The 12% decline in residential sales to 3,86,365 units indicates that 2026 is becoming a buyer’s market for those seeking quality over quantity. As sales volumes hit their lowest levels since 2022, developers are focusing on project execution and timely delivery rather than launching a flurry of new projects. For prospective homeowners, this translates to more “ready to move in” inventory and a better bargaining position, as developers seek to clear existing stock before committing to fresh construction cycles.

In Q4 2025, sales contracted by 10% year over year, reaching a low of 95,049 units. This “demand re timing” suggests that while people still want to buy homes, they are waiting for the right value proposition. With new supply also hitting a multi-year low (3,61,096 units), the market is avoiding the trap of oversupply. Buyers in 2026 can expect stable pricing bases, particularly in the mid-income segment, as developers prioritize project viability over volume-led liquidation.

Which Indian cities are currently the most expensive for housing?

Mumbai Metropolitan Region (MMR) remains the undisputed most expensive housing market in India, with average prices reaching ₹14,000 per sq. ft. in late 2025. However, the biggest shift occurred in the second spot, where Bengaluru has overtaken Delhi NCR. Bengaluru’s prices surged to ₹9,500 per sq. ft., exceeding Delhi NCR’s average of ₹9,167. This flip reflects the high value placed on the “Silicon Valley of India” and its premium residential micro markets.

This valuation shift is a direct result of the different growth trajectories of these cities. While Delhi NCR saw a staggering 49% growth in 2024, it cooled significantly to 6% in 2025, whereas Bengaluru’s growth has remained consistently strong. For investors, this suggests that Bengaluru and MMR offer high ticket stability, while cities like Pune and Ahmedabad offer more accessible entry points with stable rental yields. The comparison below highlights the cost of living transition across major metros.

Average Property Rates in Top Cities (Q4 2025)

What is the status of unsold inventory in the Indian real estate market?

The unsold inventory overhang remained within “comfortable limits” throughout 2025, signaling that the market is not facing a supply glut despite the dip in sales. Developers have been disciplined with new launches, which fell to 3,61,096 units—the lowest annual supply since 2021. This calibrated approach ensures that inventory levels stay manageable, protecting the capital appreciation of existing properties and preventing a crash in market values.

A notable trend is that unsold inventory growth is more pronounced in the higher ticket luxury categories. Wealthy buyers often have longer decision cycles, and the premium segment typically has lower liquidity than mass and mid-income housing. In contrast, affordable and mid-segment housing continues to see faster churn, especially in peripheral micro markets where infrastructure like new metros and expressways are being completed. This “supply calibration” is the foundation for a stable pricing environment as we enter the 2026 fiscal year.

The 2025 performance of the Indian real estate market marks a pivotal shift toward maturity and stability. While the slowing of average price growth to 6% might seem like a cooling off, it actually reflects a healthier, more sustainable environment for both developers and homeowners. By moving away from the volatile 17% growth of 2024, the market has established a “stable pricing base” that prevents a bubble while still offering capital appreciation in high-demand hubs like Bengaluru and Hyderabad. The disciplined management of new supply and inventory ensures that the sector remains resilient against economic headwinds. As we move into 2026, the focus will likely remain on execution, infrastructure-led demand, and affordability. For the savvy homebuyer or investor, this normalized market offers a rare window of transparency and predictability to secure long term value in India’s most prominent metropolitan centers