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India's housing market saw a 4% year-on-year drop in unsold inventory across the top seven cities, falling to 5.59 lakh units by March 2025, according to Anarock. The decline was led by strong sales in the INR 40-80 lakh and sub-INR 40 lakh segments. Budget housing inventory fell 19%, while luxury homes priced above INR 1.5 crore saw a 24% rise due to new supply outpacing demand. Overall sales dropped 28% in Q1 2025, with launches also down 10%. Experts suggest policy support, like Maharashtra's incentives for peri-urban affordable housing, is needed to rebalance the market amid rising construction costs and shifting buyer preferences.
India's housing market saw a drop in unsold inventory across its top seven cities, falling by 4% year-on-year to nearly 5.6 lakh units by the end of March 2025, according to data released by real estate consultancy Anarock. The fall was mainly due to strong sales in the budget and mid-income segments, even as luxury housing inventory increased. Advertisement
The seven major cities covered include Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru, Hyderabad, Chennai, Pune, and Kolkata. Together, they recorded a reduction in unsold units from 5.8 lakh in March 2024 to 5.59 lakh in March 2025.
Homes priced under INR 40 lakh saw the steepest drop-down 19% from 1.4 lakh to 1.12 lakh unsold units-reflecting a steady demand for budget housing in urban areas. Similarly, the INR 40-80 lakh category saw a 10% fall in unsold stock.
However, in contrast, the number of unsold homes priced above INR 1.5 crore jumped 24%, rising from 91,125 to over 1.13 lakh units. Anarock Chairman Anuj Puri explained that while luxury housing has been in demand post-pandemic, a lot of new supply was added over the past two years, leading to this buildup in inventory.
Over the last few years, developers have shifted their focus from affordable homes to higher-end residential projects. Puri said that affordable housing took the worst hit during the pandemic due to lower launches and weaker sales. At the same time, premium and luxury projects saw increased buyer interest, especially among end-users looking for larger homes.
Another reason behind the slowdown in affordable housing is the sharp increase in land and construction costs. Developers find it harder to price projects under INR 40 lakh profitably in major metros, leading to fewer launches in that segment.
Despite the decline in unsold inventory, overall housing sales also dropped during the January-March quarter of 2025. Sales fell 28% to around 93,280 units, compared to over 1.3 lakh units sold in the same period last year. New launches too fell by 10% to just over 1 lakh units in the same quarter.
While the demand remains strong in select segments, the market is seeing a realignment, with developers slowing down launches and shifting their strategies based on changing buyer preferences.
The Maharashtra government recently extended incentives for developers building homes under the affordable housing category in peri-urban areas. Experts believe such policy support is crucial to revive supply in this segment and maintain a balanced housing market that caters to both first-time buyers and premium investors.
While India's overall housing stock is improving, the gap between demand for affordable homes and supply of luxury units is widening. Developers and policymakers may need to rethink their strategies to ensure balanced growth across income groups.
Source: PTI
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