Real Estate Recovery In Motion: Gurugram, Chennai Outperform

India’s residential real estate market saw a notable turnaround in June 2025, as housing sales (absorption) across the top eight tier-1 cities rose 2 percent year-on-year—the first annual growth in 12 months.
This uptick comes after declines of 11 percent and 2 percent in April and May, respectively, and is largely attributed to the base effect fading from the high absorption seen in April–May 2024. However, on a quarterly basis, sales were still down 4 percent year-on-year. 

Mixed Sales Trends Across Cities: Key Highlights

• Gurugram (Delhi-NCR):
  • Led the recovery with a 68% year-on-year (YoY) jump in housing sales volumes.
• Chennai:
  • Recorded a 24% YoY increase in residential property sales.
• Hyderabad:
  • Posted a 15% YoY rise in housing volumes.
• Mumbai Metropolitan Region (MMR):
  • Witnessed a 29% YoY decline in housing sales.
• Pune:
  • Saw a 27% YoY drop in residential sales activity.
• Bengaluru:
  • Recorded a more modest 6% YoY decline in sales volumes.

Prices Remain Robust Despite Mixed Volumes

Despite volume moderation in certain cities, housing prices continued to rise steadily. In June 2025, average absorption prices in top-tier cities surged 20 percent year-on-year, compared to 10 percent in May.
“Pricing growth remained firm across cities, aided by healthy inventory levels (driven in turn by calibrated supply),” the UBS report stated.

On a quarterly basis, prices remained largely flat but still posted a strong 14 percent year-on-year increase.
Gurugram again led the trend with a sharp 40 percent year-on-year price rise, followed by Chennai (21 percent) and Bengaluru (14 percent). MMR, Pune, and Hyderabad recorded moderate gains of 8 to 10 percent, signaling continued pricing resilience.

New Launches Decline, Inventory Stays Controlled

The report noted that new residential launches across major cities declined by 12 percent year-on-year in June, suggesting a demand-calibrated strategy by developers.
As a result, the inventory-to-sales (I/S) ratio—which tracks inventory levels relative to actual sales—remained largely stable. It rose slightly to 1.68x in June from 1.66x in May, far below the peak of 3x observed during previous downcycles.

Inventory Build-up In Southern Markets

Conversely, inventory levels in southern cities such as Hyderabad, Bengaluru, and Chennai increased year-on-year.
The data aligns with expectations that year-on-year sales trends would improve beginning in June as base effects diminished. UBS analysts maintain a positive outlook for MMR and Gurugram, citing strong price growth and controlled inventory levels. They expressed caution regarding Bengaluru and Hyderabad due to rising inventory ratios.

(With Inputs From ANI….)

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