Housing sales, launches continue to correct in Q1 of 2025

Home sales and launches across tier 1 markets have shown a falling trend both sequentially and annually in the first quarter of 2025, according to data by PropEquity, pointing to a continuing correction in the market that has been a trend last year as well.

Sales have fallen by nearly a fourth on year and new supply by over a third. Sequentially sales have fallen by 13 per cent and new launches by 12 per cent. The only city that saw a rise in sales and launches was Bengaluru.

In February businessline had reported that home sales and launches had dropped in the second half of 2024 compared to the first half.

The cities and regions in the survey are Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Navi Mumbai, Pune, Thane, and the Delhi-National Capital Region.

Pointing out that the housing market was seeing a correction after three years of robust sales Samir Jasuja, founder and CEO of PropEquity said, “Rise in home prices and caution on the part of investors due to geo-political developments and certain weaknesses in the Indian economy have resulted in drop in sales.”

However the sales to launch ratio has remained consistently above 100 per cent. With launches lagging sales, inventory has reduced sharply and for future quarters this poses a risk to their pre-sales growth.

In a recent note on the segment, HSBC Securities had said that top listed developers had already achieved 70 per cent of their FY25 guidance in the first nine months of the year. However, “they have lagged on launches versus guidance which has been a sector-wide problem.”

“Although this provides a cushion, further delay in launches exposes them to missing their pre-sales given that there is little inventory to sell,” it added. At an aggregate level developers have achieved only 61 per cent of their launch guidance.

Several analysts have commented on the residential cycle peaking. According to the PropEquity data traditionally high supply markets such as Hyderabad, Pune and Thane have seen significant declines.

Sales dropped the most in Hyderabad, followed by Mumbai, Pune, Kolkata, Thane, Navi Mumbai, and Chennai. The markets that saw the steepest fall in launches were Kolkata, Mumbai, Thane, Pune, and Chennai.