Real Estate Outlook For 2025: Prices Expected To Surge, Listed Developers To Roll Out New Housing Supply

The year 2025 is expected to bring increased new supply in the real estate market of India, which would be a massive improvement in comparison to the tepid movement seen in 2024. A recent report by ANAROCK Property Consultants shows that the coming year will see a significant new housing supply by some listed developers. In 2024, the new housing supply saw limited growth as compared to 2023. Various factors contributed to this slow movement such as elections-related approval delays in the first half of the year (H1) and state elections in the second half (H2). 

What will drive up new housing supply in 2025?

As per the data, the top 11 listed developers have committed to launching around 253.16 million sq. ft of new housing supply over the next few years. However, only 23 per cent of this planned supply, around 57.15 million sq. ft., was launched in H1 FY 2025, showing a strong new supply pipeline over the coming quarters.

Says Prashant Thakur, Regional Director & Head – Research, ANAROCK Group, “Various factors indicate that 2025 will see significant new supply added across cities, particularly by these listed developers. Amid high demand for their branded offerings, they have been aggressively tapping the capital markets via Qualified Institutional Placements (QIPs) for their expansion.”

In fact, these developers raised Rs 12,801 crore via QIPs in the first nine months of 2024 alone. This shows that these players are well-capitalised to meet the growing demand for housing.

Who Are The Leading Developers?

Among the top suppliers, Bengaluru-based Prestige Group is taking the lion’s share of the planned supply with a target of 75 million sq. ft. The group, however, is looking at a measured approach by launching only 13 per cent (10.05 million sq. ft.) in H1 FY 2025. 

Signature Global is also following up with plans for 29.3 million sq. ft. of new supply, out of which 32 per cent has already been launched.

The data shows that Godrej Properties has launched an impressive 70 per cent of its planned 21.9 million sq. ft of new supply. It has 21.9 million sq. ft. of supply since the beginning of FY2025.

A Look At Inventory Overhang

According to the report, the expected surge in the housing supply is supported by the record-low inventory overhang across the top seven cities in India. The data shows that as of the end of Q3 2024, the inventory overhang has dropped to 14 months, its lowest level in the last decade.

This low inventory overhang will also prompt developers to add more supply to the market. Says Thakur, “This will prompt developers to meet the robust demand for their offerings with more supply across cities.”

Across the top seven cities, Bengaluru has recorded the lowest overhang at just 8 months. Hyderabad, on the other hand, has recorded the highest overhang among the top seven cities at 19 months, despite some new supply additions in recent years.

Bengaluru saw its unsold stock drop by 6 months while Hyderabad saw a dip of just two months.

An inventory overhang of 18-24 months is considered healthy in any given period. Inventory measured in months indicates the number of months it will take for the current unsold housing stock on the market to sell at the current absorption rate. 

Housing Prices On The Rise Across Tier I, Tier II Cities

The residential prices across the top 7 cities have been rising in the last six decades. A previous report noted that demand for luxury homes after the pandemic has seen a continuous rise, while there have also been record new launches and sales of costlier homes across these cities.

The average ticket size of homes sold in the top 7 cities was priced at Rs 1.23 crore in H1 FY 2025, against Rs 1 Cr in the corresponding period of FY 2024. At 56 per cent, NCR saw the highest average ticket size growth, from around Rs 93 lakh in H1 FY2024 to over Rs 1.45 Cr in H1 FY2025.

However, in an interesting shift, some outlying areas have also seen higher price growth over these cities in the last six years. According to a previous ANAROCK report, Bengaluru’s peripheral area Gunjur saw a jump in residential price by almost 69 per cent, rising from Rs 5,030 per sq. ft. in 2019 to Rs 8,500 per sq. ft. in Q3 2024. The city’s prime area Thannisandra Main Road, on the other hand, saw a 62 per cent average price growth in the same period, rising from Rs 5,175 per sq. ft. to Rs 8,400 per sq. ft. in Q3 2024. 

NCR’s Noida Expressway too saw a 66 per cent price hike while the prime area Raj Nagar Extension witnessed a 55 per cent increase.

Improved connectivity and overall development in many peripheral areas have boosted their liveability, thereby contributing to the price growth.

Tier II cities are not far behind. A report by PropEquity, an online real estate data and analytics platform, shows that property prices across the top 30 Tier II cities in India have seen an unprecedented price surge while some others were grappling with a surprising dip. For instance, Jaipur saw a 65 per cent jump in the average price of projects that were newly launched wherein the prices climbed from Rs 4,240 to Rs 6,979 per sq. ft.

In Northern India, Agra has witnessed a 59 per cent surge in prices now averaging Rs 11,111 per square foot, second only to Goa. Chandigarh and Bhiwadi saw 34 per cent and 25 per cent growth in prices respectively, the new launches in these cities were very few (between 3-5 projects) during this period.

The rise in housing prices across both Tier I and Tier II cities is a reflection of housing dreams becoming more difficult to achieve. However, for buyers, the upcoming new supply could mean greater options and the possibility of more competitive pricing as developers vie for market share.