Housing market shows signs of recovery as sales volumes rise after year-long slump
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Uneven demand recovery across cities
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Supply side shows strength in select markets
Prices climb, inventory stays comfortable
Outlook: Opportunities for organised players, affordability a concern
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After a prolonged slump in housing sales volumes, green shoots of recovery are becoming visible. According to a recent report by Nuvama Institutional Equities , residential sales volumes in India rose 1% year-on-year in June 2025, breaking a 12-month streak of annual declines.This marginal, albeit modest, increase is significant as it is aided by a low base and may mark the beginning of a turnaround in market sentiment.While volume growth remains tepid, sales by value surged 23% YoY in June, supported by higher ticket-size deals and improved buyer confidence.The quarter (Q2CY25) witnessed a 9% YoY rise in sales value, while H1CY25 posted a 5% YoY increase, reflecting gradual momentum despite macro headwinds.The recovery, however, is not broad-based. Delhi-NCR led the demand rebound with a sharp 66% YoY increase in H1CY25, followed by Chennai with a 26% jump.In contrast, key western markets like the Mumbai Metropolitan Region (MMR) and Pune saw demand contraction of 12–14%, while Hyderabad slipped 20% YoY. Bengaluru and Kolkata showed moderate improvement.Launches by value were up 5% YoY in June, supported by a 153–156% YoY spike in supply in NCR and Bengaluru, according to Nuvama 's analysis.However, launch volumes continued to face challenges, dropping 4% YoY in June and 1% in Q2CY25. Western cities and Kolkata remained weak spots, with new launches falling 19–29% YoY.Despite demand disparities, inventory levels remain steady at 18 months pan-India, in line with May 2025 figures. Markets like Pune and NCR continue to be the healthiest, with inventory levels of just 11–13 months.Meanwhile, price appreciation has been robust across cities—up to 26% YoY in NCR and 16–17% in Kolkata and Chennai—largely led by luxury and premium housing segments.Nuvama's report highlights that RERA-driven consolidation is favouring organised developers with stronger pipelines and financial resilience.With the RBI's recent rate cuts and improving launch activity, leading players like Prestige Estates and Brigade Enterprises (both rated 'BUY') are expected to benefit from the ongoing shift in market dynamics.However, a deterioration in housing affordability—driven by rising prices and stagnant incomes—remains a looming concern.According to Nuvama, while real estate stocks continue to trade at reasonable valuations, sustained cash flow growth and disciplined expansion will be key to delivering medium-term returns.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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