New Delhi | INVC News Desk —
India’s housing market is witnessing its sharpest downturn in recent years, with a staggering 19% decline in home sales and a major drop in new project launches across the country’s eight biggest cities in Q1 2025. The sharp dip—confirmed in a new report by PropTiger.com—is being seen as a direct result of job uncertainty, rising home loan interest rates, and the skyrocketing cost of construction materials.
According to the report, this isn’t a one-off blip. The previous quarter, October–December 2024, had already set alarm bells ringing with a massive 26% fall in home sales and a 33% slump in new project launches—despite the festive season usually considered a boom time for property purchases.
📉 Ahmedabad, Hyderabad, Pune Worst Hit
The housing slump has affected almost every major city—with Hyderabad and Mumbai witnessing the steepest declines at 26%, followed by Pune at 25%. Only Bangalore (+13%) and Chennai (+8%) managed to buck the trend with modest growth. Kolkata remained relatively stable, posting just a 1% dip.
The construction sector, which directly supports millions of jobs, is already feeling the pressure. With developers holding back on launching new housing projects due to weak demand and high input costs, contractors, laborers, suppliers, and real estate service providers are staring at potential job cuts and income losses.
💸 Rising EMIs, Investor Retreat Spook Buyers
A key reason behind the real estate slowdown is the increasing unaffordability of buying a home. With cement, steel, transportation, and furnishing costs on the rise, the overall construction cost has soared, making housing prices unaffordable for the average buyer.
Add to this the high EMIs caused by earlier home loan rate hikes, and many investors and middle-class buyers are now sitting on the sidelines. Employment uncertainty due to global economic headwinds has only added fuel to the fire.
“Buying a house is a once-in-a-lifetime investment. With fears of job loss and economic slowdown, people are hesitant,” said Dhruv Agarwal, CEO of Housing.com.
🏦 RBI’s Lifeline: Will It Be Enough?
Sensing the crisis, the Reserve Bank of India (RBI) recently cut repo rates twice in a row. In response, SBI, Bank of Maharashtra, and Bank of India have all slashed their lending rates, making home loans slightly cheaper.
Real estate experts say this move may prevent a total collapse, but recovery will take time unless inflation stabilizes and buyer confidence returns.
📊 Expert Advice: Don’t Overburden Your Finances
Investment expert Anil Saxena advises buyers to plan carefully and not let EMIs exceed 15-20% of their monthly income. He recommends opting for long-term loans to keep EMI values lower, and to only buy a home after arranging for emergency funds.
“High EMI leads to high risk in case of job loss. A lower EMI is always safer and more manageable,” Saxena added.
⚠️ Bottom Line:
India’s real estate sector is under serious stress. If the double-digit dip in both home sales and new launches continues, it could snowball into a larger employment and consumption crisis, affecting everything from housing to household goods.
With the next quarter expected to reflect the true impact of RBI’s interest rate cuts, all eyes are now on how quickly the sector can bounce back.
