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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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