Festive Realty Property Power Play on Test
Despite all the hype around luxury/super luxury housing, the overall decline in sales this year, especially ahead of the festive season, does not augur well for the sector. And as value buying challenges loom large, the big question is: will the festive season power the property market?That the residential slowdown has cast its shadow over festive realty is clearly evident from the tell-tale numbers. According to a PropEquity report, housing sales dropped below the one lakh mark units in Q2 2025 (April-June 2025 period) for the first time in 14 quarters. The real estate data analytics firm in its report said that while sales fell 19% yoy, supply remained below one lakh units for the fourth consecutive quarter.
Vinod Behl
The Q3 numbers also point to the decelerating residential real estate amid high prices. A recent report by Anarock Property Consultants says that housing sales in the top seven cities registered a 9% year-on-year decline, with the volume of units going down from 1,07,000 to 97,080. The inventory overhang data also points to this as there was a marginal decline in unsold units from 5,62,148 in Q3 2024 to 5,61,756 in Q3 2025. However, since there are robust luxury housing sales, the total sales value in Q3 (July-September 2025) clocked a 14% yoy increase from nearly INR 1.33 lakh crore to about INR 1.52 lakh crore.
Home prices have more than doubled in the past decade. Over the past 5 years, high-rise apartment prices, according to Magicbricks data, have seen an average surge of 87%.Gurgaon and Greater Noida registered the steepest price increase of 166% and 163%, respectively, while Mumbai, Bengaluru, Hyderabad, and Pune recorded 107%, 105%, 90% and 92% price appreciation respectively, and NCR saw the highest 24% price increase in Q3 2025.
This sharp increase in prices is the result of the spurt in land prices and growing demand for larger lifestyle homes, and developers pushing supply of homes with higher configurations to meet the demand. This is clearly evident from the robust increase in supply for 3 BHKs (31%), 4 BHKs (90%) and 5 BHKs (95%). The demand for spacious luxury/super-luxury homes has been largely investor-driven. As per the Anarock data, the luxury housing category witnessed highest supply of 38% and this together with premium homes carved out a big share of 62%. This distinct trend in the housing market clearly reflects the shift in consumer preference. As a result of which, the volume and value of premium, luxury and super luxury homes is going up across the country.
On the other hand, the new supply in the affordable segment has declined from around 40% in 2019 to around 15% in H1 2025. Its share in the overall sales fell from 38% in 2019 to 18% in H1 2025. Affordable housing supply in Q3 2025 dropped to the lowest 16% and the mid-segment (INR 40-80 lakh) supply was also low at 23%.
As housing supply deviates towards the premium and luxury segment, it has adversely impacted affordability in the prime areas of top cities and their suburbs. With the continuous shrinking of supply of affordable homes, first time and entry level homebuyers have been badly impacted. They have been increasingly finding it difficult to buy a home within their budget and many of them are gravitating towards rented accommodation, leading to an increase in rentals.
Notwithstanding these unfavourable factors, a number of positives ring in hopes for the festive real estate. The GST rationalisation will futher strengthen the positive consumer sentiment generated by 100 bps interest rate cut. It has also created room for further rate cut. According to economists, GST rate cuts are likely to give 60 bps push to GDP growth and result in 100 bps fall in inflation. The government has estimated that it will add 20 trillion to the GDP. As per Chief Economic Advisor, V Anantha Nageswaran, GST rates rationalisation may limit Trump tariff blow to 30 bps of GDP as it will create conducive conditions for private investments. As such, the supporting economy with a likely GDP growth of 6.9% will stand the real estate sector in good stead. Sudhir Pai, CEO, Magicbricks, says that though the GST rate cuts don't directly impact real estate, they will however have an indirect impact by way of boosting disposable income of consumers, in turn encouraging them to invest more in housing.
According to the government, GDP cuts will add up to 2.5 trillion in earnings for people to boost their disposable income. Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle-East & Africa, CBRE, believes that though GST rates rationalisation is likely to bring down input prices for developers, it may take some time before the benefits accrue to home buyers. However, as per Magazine, the move is likely to generate a positive sentiment among buyers and may have a ripple effect on real estate, especially retail and I &L. Ganesh Devadiga, Principal Partner & Sales Director, Square Yards, says that the GST relief will allow developers to offer discounts without affecting margins to light up festive realty.
The likely moderation in property prices in H2 2025, supported by declining inflation, reduction in repo rates, expanding infra, growing institutional funding, and high demand for premium housing will help push housing sales in the festive quarter. According to Siva Krishnan, Head Residential Services, India, JLL, high-end homes saw 14% demand increase in H1 2025, despite overall residential slowdown in the same quarter.
Healthy high-end sales have seen growth in housing demand by value. Said Ankit Kansal, MD, 360 Realtors & Axion Developers, the festive quarter is expected to see 20-30% rise in property transactions on a month-on-month basis due to strong underlying structural factors, such as GST rationalisation, strong consumer sentiment and cheaper home loan rates.
Magicbricks CEO opines that end-users will fuel the festive real estate, reinforcing that housing is both a necessity and a trusted long-term wealth creator. However, Ashwinder R Singh, Chairman, CII Real Estate Committee and Vice Chairman, BCD Group, has the last word when he says, "As demand now shifts from opportunistic to purposeful, festive optimism no longer closes deals, rather, value for money does." And with that, the all-important question remains: Will the festive quarter power property market this year?
Published on:
13 October 2025
Published in: NBM&CW OCTOBER 2025
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