The residential real estate sector recorded a notable downturn in the 2025 calendar year, with housing sales across seven major urban markets declining by 14% year-on-year. Approximately 3.96 lakh units were sold during the year, down from nearly 4.6 lakh units in the previous year. This broad market contraction was driven by factors such as rising property prices, economic uncertainty, and shifts in the employment landscape, particularly within the technology-driven job market. Despite the decline in sales volume, the total value of homes sold rose marginally by 6% to over ?6 lakh crore, indicating sustained demand for higher-priced properties and a continued trend toward premiumization. Mixed Performance Across Key Southern Markets Real estate markets in the southern region presented a mixed performance during 2025. One major southern market emerged as a standout, recording a 15% year-on-year increase in housing sales, with approximately 22,180 units sold. This growth contrasted sharply with other large southern markets, where one recorded a marginal 5% decline in sales with around 62,205 units sold, while another experienced a sharper 23% drop, totaling approximately 44,885 units. Collectively, these southern markets accounted for roughly 129,270 units sold during the year, highlighting a clear divergence within the region, with one market defying the broader downward trend. Regional Market Dynamics and Supply Trends Beyond the southern region, other major markets also experienced notable sales contractions. One western metropolitan region saw an 18% year-on-year decline, with approximately 1.28 lakh units sold, remaining the largest market by volume despite the drop. Another prominent western market recorded a 20% decline, with sales of about 65,135 units. Meanwhile, a major northern region experienced an 8% annual decline, with approximately 57,220 units sold. New housing supply across the seven major markets remained relatively resilient, increasing by 2% year-on-year to around 4.19 lakh units in 2025. However, the combination of increased supply, moderating demand, and rising prices led to a 4% rise in unsold inventory, reaching approximately 5.77 lakh units by year-end. One southern market, in particular, witnessed a sharp 23% increase in unsold housing stock. Premiumization and Market Recalibration Industry experts described 2025 as a phase of market recalibration rather than demand destruction. Buyers remained active but were increasingly selective, with a clear shift toward premium and luxury housing segments. The rise in total sales value despite falling transaction volumes reinforces this trend. Developers adopted more disciplined supply strategies, helping sustain price stability across many markets. Continued income growth and strong interest from overseas buyers further supported demand for higher-value homes. Peer Market Comparison Among the southern markets, one city stood out with a 15% growth in housing sales, while its regional peers recorded declines of 5% and 23%, respectively. This contrasted with the broader trend across the seven major markets, where most regions experienced negative growth, underscoring a widespread market adjustment nationwide.

https://www.livehomes.in/news_letter