India's real estate market, especially in the metropolitan regions of Delhi-NCR and Bengaluru, is experiencing a notable slowdown in home sales during the January-March quarter of 2025. A new report from Knight Frank India, a leading property consultancy, reveals that buyer sentiment has been negatively impacted due to rising property prices and fears of job loss, particularly in the IT sector.

Sharp Decline in Home Sales in Delhi-NCR and Bengaluru

According to the report, Delhi-NCR saw an 8 percent year-on-year decline in sales, with just 14,248 housing units sold during the first quarter of 2025. Similarly, Bengaluru experienced a 5 percent drop, selling 12,504 units.

This slowdown comes despite robust sales activity in other major cities. Mumbai led the pack with 24,930 units, marking a 5 percent increase, while Pune and Chennai saw impressive year-on-year growth of 20 percent and 10 percent, respectively.

Job Cuts in the IT Sector Have Dented Buyer Confidence

Market experts attribute the decline in sales to widespread layoffs, especially in technology and IT companies, which form the core employment base for cities like Bengaluru, Noida, and Gurugram.

“The cautious mindset among buyers is reflective of changing job patterns, particularly with the rise of AI technologies, and rising real estate prices, which has made many reconsider home buying decisions,” said Ashwinder R Singh, Chairman, CII Real Estate Committee.

However, he also expressed optimism that this is a short-term adjustment and that as job markets stabilize, housing demand—especially for well-priced and well-executed projects—will rebound.

Rising Property Prices Weigh Heavily on Buyers

While demand took a dip, property prices continued their upward trajectory. Delhi-NCR and Bengaluru recorded the highest price growth across the country, increasing by 12 percent and 16 percent, respectively. The higher costs, when coupled with economic uncertainties, have made many prospective homebuyers defer their decisions.

“Price rise is not just a reflection of inflation, but also increasing land, construction, and regulatory costs. Still, premium housing demand remains stable,” said Mudassir Zaidi, Executive Director, North, Knight Frank India.

High-End Segment Remains Resilient

Interestingly, while affordable and mid-segment housing took a hit, the luxury housing segment remained resilient.

• Sales in the Rs 1-2 crore segment grew by 2 percent.

• Homes priced between Rs 2 crore and Rs 5 crore witnessed a 28 percent increase in sales.

• The Rs 10 crore+ segment is witnessing a surge in interest as wealthier buyers look for more exclusive, spacious, and premium homes, especially in NCR.

This highlights an important trend: affluent buyers are undeterred, and their confidence in the long-term potential of real estate investment remains intact.

Increase in Unsold Inventory

At the national level, the report highlighted a 5 percent year-on-year increase in unsold inventory, now standing at 5.03 lakh units.

This surge is largely attributed to:

• Fresh launches by developers who are anticipating future demand

• A lag in purchase decisions due to economic volatility

• Shift in buyer preference toward ready-to-move-in or high-value properties

Real estate consultants believe this may lead to price corrections in certain micro-markets or encourage developer incentives such as discounts or easy payment plans.

The Outlook for the Upcoming Quarters

Despite the short-term dip, experts remain optimistic about recovery. If employment stability returns, particularly in the IT and tech sectors, and interest rates remain moderate, the housing market may bounce back within the next two to three quarters.

Key supportive factors include:

• Strong urban migration

• Growing demand for owned homes over rented properties

• Expanding middle-class aspirations

• Government policies like PMAY, lower GST, and RERA-backed transparency

Conclusion

The Knight Frank India Q1 2025 report offers deep insights into the changing dynamics of India’s urban housing market. While job uncertainties and rising prices have temporarily slowed sales in Delhi-NCR and Bengaluru, the underlying fundamentals remain strong.

Cities like Mumbai, Pune, and Chennai are still seeing steady demand, especially in the premium and luxury segments, indicating that buyer confidence hasn’t completely eroded—it’s just more cautious and selective.

As India’s macro-economic environment stabilizes, and with developers adapting to new buyer expectations, the residential real estate sector could regain momentum in the coming months. But until then, expect slower inventory movement and greater price sensitivity—especially in regions heavily dependent on IT employment.

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