India’s prime residential markets saw muted activity in Q3 2025, with home sales remaining flat year-on-year and new supply inching up just 3%, according to the latest Housing.com report. The analysis attributes the slowdown to persistent pricing pressures in the affordable housing segment, even as demand in mid- and premium categories held firm, reflecting a widening affordability gap in the country’s housing landscape.

“The price rally over the past half-decade has dampened sales in the affordable housing segment, a category vital for the sector’s long-term sustainability and growth. While demand and supply in the premium and high-end segments remain robust, supported by strong consumer sentiment, supply in the affordable housing category has been constrained despite steady underlying demand,” said Praveen Sharma, CEO, REA India (Housing.com).

“A two-pronged approach is essential: first, to encourage developers to boost supply in the affordable housing segment, and second, to improve affordability for end-users,” Mr. Sharma added.

Developer confidence in the sector unshaken

The report revealed that a total of 94,419 new housing units were launched across the top eight residential markets during Q3 2025, compared to 91,863 units in Q3 2024, marking a modest yet meaningful recovery after several quarters of fluctuating supply. On a sequential basis, new supply increased 12% quarter-on-quarter (QoQ), reflecting developers’ renewed confidence following a phase of demand recalibration earlier this year.

Markets such as Bengaluru (22% QoQ), Hyderabad (21%) and Ahmedabad (23%) led the quarterly uptick in new launches. Year-on-year, cities like Kolkata (69%) and Chennai (51%) showed strong expansion, indicating heightened developer activity in emerging and high-demand corridors.

Meanwhile, the Mumbai Metropolitan Region (MMR) and Pune, which together continue to dominate national supply, accounted for nearly 40% of total new launches this quarter. Although MMR witnessed a 17% YoY decline, Pune remained largely stable, suggesting sustained traction in Western India’s housing ecosystem.

Mid, premium segments dominate sales

The report shows that fewer than 100,000 homes were sold in the eight markets covered in the analysis, a sequential fall of 1%.

The above-INR-45-lakh segment accounted for an 84% share in quarterly sales, in an indication that soaring property value in the country is pushing millions into costly rentals in the world’s most populous country, it added.

Among major markets, Bengaluru (23%), Kolkata (43%) and Chennai (51%) recorded annual growth in sales, buoyed by robust job markets and steady inflows of working professionals. NCR and MMR, by contrast, witnessed YoY declines of 14% and 4%, respectively, owing to pricing adjustments in premium segments.

To restore balance and revive momentum, targeted policy interventions are essential – including fiscal incentives, streamlined approvals, and innovative financing mechanisms for both developers and buyers, the report added.