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Key Points

India's housing market is showing strong momentum with sales rising significantly for the third month in a row. The National Capital Region and southern cities like Bengaluru are driving this growth with impressive absorption rates. However, soaring prices, especially in Mumbai and Chennai, are creating serious affordability concerns for buyers. Analysts expect market volatility to continue as rising mortgage rates battle against valuation worries.

Key Points: India Housing Sales Rise 23 Percent in August as Affordability Concerns Loom

  • Housing sales by value surged 23% YoY in August marking a third month of growth
  • National Capital Region led demand with a massive 55% YoY increase in absorption
  • Prices rose sharply across cities led by 19-20% jumps in MMR and Chennai
  • Unsold inventory improved to 17 months with NCR and Pune having the healthiest levels
  • New project launches were flat YoY with southern cities seeing the most new supply
  • The report highlights a critical concern over affordability amid premiumisation trends
2 min read

Housing sales rise 23% YoY in August; affordability concerns remains: Nuvama

India's housing market grows for 3rd straight month with NCR and Bengaluru leading sales, but soaring prices in MMR and Chennai raise affordability red flags.

"We believe volatility shall persist, and reckon stocks shall continue to be range-bound... - Nuvama Institutional Equities Report"

New Delhi September 24

India's housing market reported steady momentum in August 2025 with sales by value expanding 23 per cent year-on-year (YoY) and 3 per cent month-on-month (MoM), led by a 12 per cent YoY and 7 per cent MoM rise in volumes, according to a sector update by Nuvama Institutional Equities.

The report highlighted that this was the third consecutive month (YoY) volume growth, marking a turnaround after 12 straight months of decline between June 2024 and May 2025.

Year-to-date (CY25) absorption by value rose 11 per cent (YoY), supported by strong demand in the National Capital Region, up 55 per cent (YoY), Bengaluru, Chennai and Kolkata were up 24 to 30 per cent (YoY) each. However, sales in Hyderabad fell 11 per cent (YoY), while Pune and Mumbai Metropolitan Region (MMR) saw a decline of 6-8 per cent each.

On the supply side, launches by value were flat (YoY) down 3 per cent MoM in August 2025. By volume, launches rose 6 per cent YoY and 4 per cent MoM.

Year-to-date, supply by value increased 4 per cent YoY, largely led by southern cities which recorded a 32 to 44 per cent jump in new project launches. In contrast, supply in MMR and Pune dipped 18-27 per cent YoY.

Inventory levels improved marginally with unsold stock declining to 17 months in August from 18 months in July and a year ago. The NCR and Pune emerged as the best markets with just 10 and 13 months of inventory, respectively, while Hyderabad remained elevated at 26 months.

Prices increased across all major cities in August on a YoY basis. The sharpest gains were recorded in MMR and Chennai, 19 to 20 per cent, followed by Bengaluru and Kolkata 11-15 per cent each. Other cities including Pune, NCR and Hyderabad saw moderate increases of 4-8 per cent.

The report noted that premiumisation remains a defining trend, as growth in sales value outpaced growth in volumes. The report also cautioned that affordability is becoming a critical concern amid surging house prices and limited mid-income housing availability.

Despite listed developers posting a 19 per cent YoY rise in pre-sales in FY25, the Nifty Realty Index fell about 5 per cent, reflecting investor concerns over weakening affordability and slowing growth.

Going forward, Nuvama expects volatility to persist. "We believe volatility shall persist, and reckon stocks shall continue to be range-bound with downside protected by falling mortgage rates even as the upside is capped by valuation/volume growth concerns" the report said.

- ANI

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Reader Comments

P
Priya S
The premiumisation trend is concerning. Developers are only building luxury apartments while ignoring affordable housing. In Bangalore, even 2BHK flats cost over 1 crore now. Government should intervene to ensure balanced development.
M
Michael C
Interesting data! The regional variations are quite stark - Hyderabad down 11% while NCR up 55%. Shows how localized real estate markets can be. Inventory levels improving is a positive sign for market stability.
A
Ananya R
As someone working in real estate sector, I can confirm the affordability crisis is real. Most new launches are targeting the premium segment. The middle class is being priced out of decent housing options. Need more balanced approach from developers.
S
Sarah B
The 17 months inventory is still quite high compared to global standards. Prices need to correct further for sustainable growth. The current growth seems driven by speculative buying rather than genuine demand.
V
Vikram M
Good analysis by Nuvama. The volatility they mention is already visible. While falling mortgage rates help, without income growth matching price increases, this recovery might not last long. Hope policymakers are paying attention! 🇮🇳

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