Residential Market Sees Mild Slowdown in FY25

Following strong performance between FY22 and FY24, residential demand across India’s top seven cities—Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), and Pune—is expected to decline by 2–4% in FY25.

According to Aniket Dani, Director – Ratings & Research, CRISIL Ratings, this slowdown is largely the result of a high base effect and affordability pressures rather than any fundamental weakness in demand.

“After a strong growth phase over the past three fiscals, residential sales are witnessing a natural moderation in FY25. Elevated capital values and a high base have weighed on demand in the near term, even as end-user interest remains intact,” said Aniket Dani, Director – Ratings & Research, CRISIL Ratings.

Why Are Homebuyers Turning Cautious?

The moderation in demand is being driven by multiple factors:

• High base effect due to record sales in previous years
• Sharp capital value appreciation, making homes more expensive
• Higher stamp duty and registration charges in certain cities
• Affordability constraints, particularly in entry-level segments

Despite this, enquiries and site visits continue, indicating buyers are postponing decisions rather than exiting the market.

Premiumisation Continues to Shape New Launches

Even as overall sales volumes soften, the premiumisation trend remains strong.

Developers continue to focus on:

• Larger apartments with higher carpet areas
• Lifestyle amenities and better specifications
• Mid-income and premium housing segments

This shift suggests that financially stable buyers are still active, while price-sensitive demand is under pressure.

Home Prices to Rise, But at a Slower Pace

Capital values are expected to rise at a moderate pace of 5–7% in FY25, compared with the 13–14% annual appreciation seen in the previous two fiscals.

“While prices are likely to continue rising, the pace of appreciation will normalise as developers focus on sustaining sales velocity and maintaining affordability,” Dani added.

This moderation is expected to make the market healthier over the medium term.

Residential Demand Recovery Likely by FY27

Looking ahead, the residential market outlook improves from FY27 onwards.

Key demand drivers include:

• Rising household incomes
• Expected reduction in home loan interest rates
• Infrastructure-led connectivity improvements
• Continued end-user-driven demand

These factors are expected to revive volumes while maintaining price stability.

Commercial Real Estate Continues Its Upward Trajectory

In contrast to housing, commercial real estate is projected to grow steadily in FY25.

• Demand expected to rise by 5–7%
• New supply projected to increase by 9–11%

Growth is being driven by:

• Expansion of Global Capability Centres (GCCs)
• Strong leasing by IT/ITeS and BFSI sectors
• Rising adoption of flexible and managed workspaces

India’s role as a global services hub continues to support office market fundamentals.

Commercial Growth May Moderate Next Fiscal

While FY25 remains strong, commercial real estate growth is expected to slow in the next fiscal, largely due to the high base of the past 4–5 years.

However, this is seen as a cyclical pause, not a structural slowdown.

The Big Picture: Stability Over Speculation

Despite near-term moderation in housing and expected normalisation in office demand, the long-term outlook for India’s real estate sector remains positive.

Urbanisation, infrastructure spending, formalisation of housing, and institutional participation continue to provide a strong foundation for sustainable growth.

Also Read: How can NRIs positively impact the growth rate of the Indian real estate market?

The post Home Sales Cool in 2025, Offices Stay Hot: What’s Really Happening in India’s Property Market appeared first on Square Feat India.

A repo rate cut is one of the quickest ways to soften the cost of borrowing. For homebuyers, this translates into lower EMIs, especially because most home loans today are linked to external benchmark rates that transmit policy changes faster than earlier systems. If banks pass on the full 25 bps cut, borrowers can expect a meaningful drop in monthly EMIs, improving affordability across segments.

Lower EMIs Can Revive Demand — Especially in Affordable & Mid-Income Housing

Real estate experts view this decision as well-timed and transformational.

Shishir Baijal – Knight Frank India

“We welcome the RBI’s positive move to cut rates by 25 bps, as it signals growing confidence that inflation will remain low on a durable basis. The reduction in borrowing costs should offer timely relief to the real estate sector… We hope this will be instrumental in boosting affordable and mid-income housing sales, which have been witnessing a sequential decline over the past few quarters.”

Baijal’s point about sequential declines is critical—end-user demand in these segments had begun softening as property prices rose across major markets.

Price-Rise Pressure Meets a Rate-Cut Cushion

According to ANAROCK Research, average housing prices across India’s top 7 cities jumped nearly 10% in 2025. For many buyers, this created a affordability mismatch—even if incomes were rising.

Anuj Puri – ANAROCK Group

“The RBI’s decision to cut the repo rate by 25 bps is a distinct positive… this move further sweetens the value proposition for homebuyers, particularly in the affordable and mid-income segments which are highly sensitive to interest rate fluctuations.”

“This rate cut provides a critical cushion to affordability… encouraging aspiring homebuyers who had paused their decisions due to price hikes to finally take the plunge.”

Puri also highlights a crucial factor: swift transmission.

“If banks swiftly pass on this rate cut to borrowers, we anticipate a renewed surge in sales velocity carrying firmly into Q1 2026.”

Luxury housing is expected to stay strong irrespective of the rate cut, but the biggest boost will likely come from fence-sitters in the mid and affordable categories.

Developers See This as a Sentiment Lifter for Both Buyers & Builders

Manju Yagnik – Nahar Group / NAREDCO Maharashtra

“A 25 basis point rate cut at this stage will meaningfully support homebuyer sentiment and improve affordability across categories. Demand has remained resilient despite elevated prices, and a reduction in borrowing costs will give fence sitters the confidence to move ahead with their purchase decisions.”

Yagnik adds that developers too gain from a softer rate environment, especially with persistent inflationary pressures in construction materials.

“The real estate sector has been navigating higher input costs… so a softer rate environment will ease financial pressure for both buyers and developers.”

Rupee Depreciation Adds Another Layer to the Demand Story

Dharmendra Raichura – Ashar Group

“The rate cut to 5.25% gives an immediate boost to affordability for home-buyers… At the same time, the depreciation of the rupee makes imported building materials costlier — a challenge for developers’ margins.”

Interestingly, this same rupee weakness creates a positive effect too:

“For NRIs… the weaker rupee makes Indian real estate more attractive and affordable, balancing demand dynamics.”

Developers who manage cost inflation well stand to gain from increased NRI participation and a broader buyer base.

A Macroeconomic Signal of Confidence — With Direct EMI Relief

Dr. Samantak Das – JLL India

“The RBI’s decision to cut the repo rate by 25 bps is a powerful, proactive signal that strategically leverages India’s macroeconomic strength — a robust 8.2% Q2 GDP expansion alongside record-low inflation.”

Das stresses that this is not a reactive move but a strategic push to make growth more inclusive.

“For the residential sector, this is a direct boost to affordability… Given the high penetration of external benchmark-linked loans, the transmission to homebuyers is expected to be quick, providing tangible EMI relief.”

He also notes that India saw price resistance in the affordable and mid-segment categories this year, with projected residential sales 8–9% lower than last year in the top cities.

The repo cut, therefore, is seen as a catalyst:

“This move… will activate the crucial segment of first-time affordable and mid-market homebuyers who have been waiting on the sidelines.”

Das expects demand revival not just in metros but across India’s Tier 2 and Tier 3 cities as well.

What This Means for You: Lower EMIs, Higher Eligibility

If banks pass on the full 25 bps cut:

• Your home loan EMI will reduce across floating-rate loans.
• Loan eligibility increases because your EMI-to-income ratio improves.
• First-time buyers in mid-income segments will find it easier to enter the market.
• Developers get relief through better sales momentum and sentiment stability.

This rate cut has arrived at a moment when the market needed a confidence push—and it may very well carry the housing sector with stronger momentum into 2026.

Also Read: RBI Repo Rate Hike May impact Home buyer sentiments

The post Repo Rate Cut to 5.25%: How Your Home Loan EMI Will Now Fall appeared first on Square Feat India.

For homebuyers, this decision directly translates into predictable EMIs and continued affordability of home loans—a crucial factor as the festive season approaches. While developers were hoping for a rate cut to spur even more demand, the current stability provides a conducive environment for long-term planning and financial confidence.

Why This Matters for You as a Homebuyer

Industry experts believe the RBI’s decision will help preserve affordability and sustain housing demand, particularly in mid- and premium-segment homes, which have seen steady interest despite recent global headwinds.

Prashant Sharma, President of NAREDCO Maharashtra, called the move a “cautious yet balanced approach” that keeps homebuyer sentiment strong. He added that while the sector welcomes stability, a calibrated rate cut in the future could further support growth—especially in affordable housing.

Rajiv Agrawal, Promoter & Co-Founder of Saarathi Group, highlighted that unchanged borrowing costs will aid Mumbai’s wave of redevelopment projects, making long-gestation cluster and society redevelopments more financially feasible. This means buyers can expect timely project deliveries and fresh housing supply in urban areas.

Similarly, Virendra Vora, Promoter & MD of Excel Infra Construction LLP, said stable rates are a “positive signal for Mumbai’s next wave of urban regeneration,” making it easier for developers to launch premium redeveloped homes in high-potential zones like Bandra Reclamation.

Bank Loan Rates & Market Momentum

Shishir Baijal, CMD of Knight Frank India, noted that with some banks already reducing home loan rates, policy stability will encourage affordability—especially in mid- and low-income segments. He said, “More transmission of past cuts is underway, which will further support housing demand.”

Dr. Samantak Das, Chief Economist, JLL, explained that after 100 basis points of rate cuts this year, holding rates now gives the system time to fully pass on benefits to buyers. He stressed that stability helps avoid over-reliance on rate cuts and instead builds a market driven by genuine demand.

However, the affordable housing market is facing challenges. Anuj Puri, Chairman of ANAROCK Group, pointed out that sales in the top metros fell by 20% year-on-year in Q2 2025, and average residential prices have surged 39% in two years. The ongoing US tariffs could impact MSMEs—the key customer base for affordable homes. Still, he expects developers to roll out festive offers and flexible payment plans to improve affordability.

Confidence, Festive Season, and Long-Term Growth

Multiple developers and analysts agree that stability will reinforce buyer confidence ahead of the festive season.

• Manju Yagnik, Vice Chairperson of Nahar Group, believes steady rates will support sustained demand in high-growth markets by keeping EMIs manageable.
• Dharmendra Raichura of Ashar Group said unchanged rates, combined with infrastructure development in regions like MMR and Thane, will keep housing demand strong.
• Sunny Bijlani of Supreme Universal added that policy stability will attract both domestic and NRI buyers, especially as urbanisation and lifestyle aspirations rise.

From the luxury segment perspective, Amit Goyal, MD of India Sotheby’s International Realty, said that with GDP growth forecast at 6.5% and inflation trending softer, housing momentum will stay “cautiously positive.”

What Experts Want Next

While most agree that holding rates now is prudent, there’s anticipation for a possible rate cut in the October policy review.

• Piyush Bothra of Square Yards said the onus is now on banks to ensure full transmission of past cuts to homebuyers.
• Vimal Nadar of Colliers India highlighted that with inflation under control, upcoming quarters could see further reductions passed on, boosting buyer activity during the festive season.
• Amit Prakash Singh of Urban Money stressed that a cut in October could act as a “timely catalyst” to boost festive demand.
• Shrinivas Rao of Vestian added that the RBI’s neutral stance will encourage fence-sitters to make investment decisions.

Bottom Line for Homebuyers

The RBI’s decision may not have brought a fresh cut in rates, but it keeps the ground steady for you to plan your purchase without fear of sudden EMI shocks. With the festive season around the corner, stable policy, possible future cuts, and developer incentives could make the next few months a strategic window for homebuyers.

Also Read: RBI Cuts Repo Rate by 25bps: Lower Home Loan Interest for Homebuyers

The post RBI Holds Repo Rate at 5.5% — Home Loan Interest To Remain As It Is appeared first on Square Feat India.

“The current slowdown is less about distress and more a strategic adjustment toward sustainable, demand-aligned growth,”
Anuj Puri, Chairman, ANAROCK Group

Pan-India Housing Snapshot – Q2 2025

City-Level Highlights

Shift in Budget Segmentation of Supply

Key Market Trends

• Luxury Leads the Market:
  The luxury segment accounted for the largest share of new launches at 27%, indicating sustained appetite for premium housing.
• Chennai Outperforms:
  Chennai saw 63% annual growth in new launches and 13% sales growth, bucking the broader slowdown.
• Prices Continue to Climb:
  NCR led price appreciation with a 27% year-on-year rise, followed by Bengaluru at 12%.
• Developers Take a Cautious Stance:
  Focus shifted to completing projects and managing inventory amid global economic uncertainties.

“While sales volumes have moderated, average prices are still rising, underscoring the resilience of end-user demand in premium segments,”
Dr. Prashant Thakur, Regional Director & Head of Research, ANAROCK

Inventory Overhang

Looking Ahead

ANAROCK expects recalibration to continue through late 2025 as developers adopt a more selective, measured approach to launches. Falling home loan rates, rising incomes, and regulatory reforms are anticipated to gradually revive demand.

“With the festive season approaching and RBI’s rate cuts improving affordability, the market is poised for a more balanced growth trajectory,”
Abhai Mani Chaturvedi, Sr. Vice President – Research & Advisory, ANAROCK

Also Read: Iconic Worli building Sportsfield home to Gavaskar, Vengsarkar and Shashtri up for redevelopment

The post Rising Prices, Slowing Sales: India’s Housing Sector Enters a Phase of Strategic Pause appeared first on Square Feat India.

The latest GRETI report highlights India as the top global improver for 2024, showcasing notable progress in transaction processes and market fundamentals. India’s enhanced transparency extends to sustainability and performance measurement, although further improvements are still needed.

Samantak Das, Chief Economist and Head of Research & REIS at JLL India, emphasized, “India’s rise to the transparent tier reflects increased institutional participation and the adoption of best practices in the commercial real estate market. The growth of Real Estate Investment Trusts (REITs) and standardized valuation processes have fostered market efficiency. With office REITs representing 12% of Grade A office stock, there is substantial potential for expansion. Regulatory advancements such as the Real Estate (Regulation and Development) Act (RERA) and the Insolvency and Bankruptcy Code have bolstered investor protection. Furthermore, digital land registry and stringent oversight by RBI and SEBI have established a strong regulatory environment. India’s commitment to sustainability is evident, with WELL certification for 70 million sq. ft of real estate in 2023, marking a 40% increase from 2021.”

Karan Singh Sodi, Senior Managing Director at JLL Mumbai and Gujarat, and Head of Alternatives in India, noted, “India’s achievement in GRETI underscores the collective efforts of the industry and government, positioning the country to attract increased capital inflows and elevate its global standing. Markets with high transparency attract 80% of global capital flows. However, the report indicates that further improvements are needed, especially in dispute resolution mechanisms. To advance further, India must focus on democratizing data access, enhancing institutional participation in public markets, and deepening its commitment to sustainability. This is crucial as India anticipates near-record capital inflows into real estate, with USD 4.8 billion recorded in the first half of 2024.”

India’s progress in transparency is marked by its significant leap from previous rankings. The country now ranks among the top ten globally for transaction processes and 12th for market fundamentals. Key factors driving this advancement include increased institutional participation, better access to asset-level information, and reduced information asymmetry. While regulatory and legal improvements have been substantial, the need for more efficient dispute resolution mechanisms remains.

The report also notes that India’s performance in transparency improvement is unparalleled in the Asia-Pacific region and globally. The expansion of the REIT market, coupled with regulatory enhancements and green initiatives, has played a crucial role in this advancement.

To move to the next tier of transparency, India must adopt more detailed investment performance indices, enhance data coverage for alternative sectors, improve public beneficial ownership records, and intensify its commitment to environmental, social, and governance (ESG) criteria. This includes reporting on nature-related risks, resilient building standards, biodiversity, and green leases. As the real estate cycle evolves in 2024, countries with deep market understanding and transparency are expected to lead in real estate liquidity and recovery.

Also Read: The Rise of Real Estate in Thane & Kalyan: Quality, Sustainability, and Affordability

The post India Achieves Landmark Transparency in Global Real Estate Market appeared first on Square Feat India.