Residential sales: Where have all the buyers gone?
How have home sales performed?
After three years of growth in home sales, the April-June quarter this year saw a big drop—20% in the big seven cities compared with the year-ago quarter, said Anarock Property Consultants. With the exception of Chennai, all the other major property markets witnessed home sales go down. Mumbai Metropolitan Region (MMR) and Pune, the two best-selling markets in recent years, together accounted for nearly half of the total sales during the June-ended quarter. Pune and Hyderabad saw the biggest drops. Despite the year-on-year drop, sales saw a marginal 3% uptick compared with the January-March period.
Why have home sales dropped so steeply?
Generally, home prices have risen rapidly after the pandemic and a seven-year slowdown before that. Now, geopolitical tensions including Operation Sindoor and the Iran-Israel war have impacted sales. However, a slight weakening in sales started last year itself, after developers sold a record number of homes in 2023.
A fall in home supplies or project launches is possibly another reason. Launches decelerated by 16% year-on-year during the period. Delayed project approvals also disrupted sales targets in 2024-25 for top developers such as Prestige Group. That bottleneck seems to have spilled over to this year as well.
Which cities have seen home prices shoot up?
The National Capital Region (NCR) saw the most year-on-year rise, up by 27% in the June-ended quarter. Bengaluru stood second. Mid-income and affordable homes saw a sharper increase in price than premium properties, as per Liases Foras Research. Experts believe that if prices are reined in, housing sales across major cities are likely to accelerate going forward.
What are the developers' plans?
Developers are still targeting higher sales in FY26 on the back of new project launches, existing inventory and a focus on premium projects that fetch higher margins. India's four leading developers—Godrej Properties, Prestige, DLF and Lodha Developers—together aim to cross ₹1 trillion in home sales in FY26, marking the strongest year yet for branded players.
However, sales timelines for most projects have been extended, and mid-size and small developers are taking longer to sell than in the post-pandemic years.
And the prospects of recovery?
With mortgage rates softening and prices holding steady, sales could see an upswing in the coming quarters. Pankaj Kapoor, managing director of Liases Foras said project launches that have been subdued mainly due to delays in approvals may recover in the latter half of this year. However, sales are unlikely to see major growth over the last year, and will stay at par with last year, or even see a marginal decline. Higher sales may come in from beyond the metro cities, taking a bigger share in the overall sales pie.
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