India's residential real estate market experienced a notable slowdown in the second quarter, with housing sales falling by 6.1% year-on-year. A new report from PropTiger indicates that buyer caution, pre-monsoon seasonality, and significant layoffs within the technology sector collectively weighed on demand across key urban centers.
Across the top eight cities in India, a total of 91,729 homes were sold during Q2, a decrease from 97,674 units recorded in the same period last year. This also represents a 4.4% sequential decline from the preceding quarter. Despite the dip in sales, new property launches saw a 6% year-on-year increase, reaching 89,161 units, suggesting that demand continued to outpace fresh supply.
Tech Sector Impact and City-Specific Trends
The sequential slowdown was partly attributed to broader geopolitical concerns, specifically the US-Iran conflict, which impacted buyer sentiment. The effect was particularly pronounced in technology-driven markets such such as Bengaluru, Pune, and Hyderabad. The report highlights that AI-led workforce restructuring and tech-sector layoffs significantly affected sentiment, especially among prospective buyers looking for homes priced below ₹1 crore.
- Pune registered the steepest annual sales decline among major markets, plummeting 20.8% to 12,642 units.
- Ahmedabad followed with a 20.2% decline, selling 7,541 units.
- Bengaluru sales dropped 9.2% to 14,186 units.
- Delhi-NCR and the Mumbai Metropolitan Region (MMR) each saw a 7% annual decline.
Conversely, some markets showed resilience. Hyderabad sales rose 14.6% year-on-year to 13,196 units. Chennai demonstrated the strongest annual growth among the eight markets, with sales surging 36% to 7,183 units. Kolkata experienced a robust 22% sequential increase, marking the strongest quarter-on-quarter recovery nationally, though its sales remained 8.6% below Q2 2025 levels.
Pricing Trends and Affordability Concerns
Despite the softer sales volumes, property prices continued their upward trajectory. The sales-weighted average price across the eight cities increased 1% sequentially, reaching ₹10,153 per square foot. This marks the second consecutive quarter where average prices have stayed above ₹10,000.
Bengaluru recorded the strongest annual price appreciation, with prices rising 26% to ₹9,931 per square foot, even amidst weaker sales. The MMR remained the largest market by both volume and value, with 24,112 homes sold at an average of ₹15,422 per square foot, a 20.4% year-on-year increase. Pune crossed the ₹8,000 per square foot mark for the first time, rising 13.7% annually to ₹8,084. Ahmedabad remained the most affordable at ₹5,295 per square foot, while also showing the strongest sequential price increase of 7%.
“Prices have held above ₹10,000 per square foot for two straight quarters even as buyers turn more selective. Kolkata and Chennai are showing genuine demand-led recovery, while Bengaluru and Pune continue to command pricing power despite tech-sector caution,” said Prakash Tejwani, CEO, PropTiger. “Disciplined supply positions developers well for the festive quarter, though affordability remains the key variable to watch.”
Reductions in GST on construction materials like cement, marble, and granite have provided an estimated 2–3% buffer in construction costs. However, this has been absorbed into project economics rather than translating into lower residential prices for buyers.
Outlook for the Festive Quarter
PropTiger anticipates that the upcoming festive quarter will serve as a crucial test for underlying housing demand. Q3 could benefit from seasonal buying, further recovery in Kolkata, and the normalization of supply in Chennai. Additionally, ongoing infrastructure projects such as Bengaluru Metro Phase 3, the Pune Line 3 extension, and Chennai Phase 2 are expected to support demand.
However, affordability remains a significant risk. With annual price gains ranging from 4.4% in Chennai to a substantial 26% in Bengaluru, continued appreciation could strain the budgets of middle-income buyers, even if overall housing demand shows resilience.