From July to September 2024, the housing market witnessed a 5% growth  in urban home sales across 8 major Indian cities. Metros like Mumbai and Bengaluru continue to drive demand, while affordability concerns and shifting consumer trends are influencing buying decisions.

Now, the question arises: With 2025 right around the corner, what are the most prominent housing market predictions? Will urbanisation continue to rise? How will policy changes impact the market? In this article, we will explore the key trends and predictions that could shape India's housing sector in the coming year.

What Will Happen to the Housing Market By the End of 2025?

The residential real estate sector in India’s top 7 cities is projected to grow by 10% to 12%, with the total sales area expected to reach 785 to 800 million square feet in FY 2025 . This projection suggests a strong demand, building on the strong foundation established in FY 2024.
Market predictions point towards two key trends that will influence Indian housing in 2025:

• An increased demand for affordable housing
• Cautious price adjustments

Additionally, housing demand in tier-2 and tier-3 cities is likely to grow, driven by the continued adoption of remote work, which makes these regions more attractive and affordable alternatives to metro cities. Infrastructure upgrades in non-metro areas are further positioning them as prime investment destinations. House price predictions suggest that by the end of 2025, property prices may witness hikes in these regions.

Realtor Commission Changes

The commission structure for realtors in India is evolving as digital platforms and direct-to-consumer sales reduce the reliance on traditional brokerage services. With the increasing popularity of real estate applications, some cities are witnessing realtors charging lower commissions.

This trend is likely to continue, particularly for standard property sales in major urban areas. Intense competition in these regions is driving down profit margins, forcing realtors to adapt. Additionally, predictions around house price movements suggest that commission adjustments may become more common as realtors compete to offer cost-effective services.

Will Housing Sales Decline?

The Indian real estate sector is projected to grow at a CAGR of 9.2% between 2023 and 2028 , making a decline in housing sales in 2025 unlikely. Demand for ready-to-move-in apartments and affordable housing projects is expected to remain steady, particularly in expanding urban areas.

However, growth in sales may be moderate as interest rates and property prices stabilise during the year, according to housing market predictions. Additionally, with buyers increasingly cautious about construction delays, the demand for completed projects is anticipated to increase in 2025.

In contrast, the luxury housing segment might see a slight dip, as buyers shift focus toward practicality and economic sustainability.

Will Housing Inventory Increase?

The housing inventory in India is expected to rise in 2025 as real estate developers focus on affordable housing projects in non-metro regions. With the government actively promoting affordable and inclusive housing initiatives, more developers are likely to align with these goals. This may lead to a steady increase in housing inventory according to the predictions on house prices.

In metro cities, however, high land costs and complex building regulations may constrain inventory growth, keeping supply below demand levels. Nevertheless, overall housing inventory and market conditions are anticipated to improve in 2025 compared to 2024, owing to the efforts to address the demand-supply gaps.

Will Home Prices Go Down?

It is unlikely that home prices will experience a significant drop in 2025. In metro areas, particularly high-demand zones like Mumbai and Delhi NCR, housing costs are expected to remain stable. Some experts even predict a slight increase in prices, driven by sustained demand and limited land availability.

In contrast, tier-2 cities may offer relatively affordable housing options due to increased supply and government incentives aimed at first-time homebuyers. However, much of the housing price trajectory will depend on factors such as India’s economic growth, inflation rates, and potential changes in GST or other housing-related taxes.

Will the Starting 2025 Be a Buyer’s Or Seller’s Market?

The beginning of 2025 is expected to favour buyers in smaller cities, where increased inventory and ongoing government incentives are projected to create favourable conditions. In these regions, buyers may enjoy stronger negotiating power as developers aim to clear unsold units, leading to competitive housing prices and buyer-friendly terms. According to the housing market forecast, these factors could make 2025 an opportune time for homebuyers in tier-2 and tier-3 cities.

In contrast, metro areas are likely to remain a seller’s market. Demand is anticipated to outpace supply in well-connected, high-demand localities, keeping prices stable and sustaining the seller’s advantage.

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Conclusion

India’s housing market in 2025 is set to be influenced by factors such as affordability, policy shifts, and changing buyer priorities. Increased supply and stable pricing trends are expected to shape tier-2 and tier-3 cities, while metro areas like Bengaluru and Delhi NCR may continue experiencing high demand and constrained inventory levels.

For first-time homebuyers, early 2025 could present a favourable time to enter the market, especially in regions supported by government-backed affordable housing schemes. Meanwhile, investors might discover promising opportunities in emerging cities with significant growth potential.

If you’re planning to buy your dream home in 2025, a home loan can ease financial stress and help you achieve your goal. At SMFG Grihashakti, we offer home loans of up to INR 1 crore* with minimal documentation, reasonable interest rates, and no hidden charges. Take the first step toward homeownership by applying online today!