After a blistering two-year surge, India’s housing market is entering a more measured growth phase. According to Crisil, average home prices are expected to rise 4–6% in FY2025–26, down from the double-digit annual gains seen earlier. Meanwhile, home sales volumes are projected to increase by 5–7%, a sign of steady demand after three years of post-pandemic recovery. This moderation comes as developers ramp up supply and unsold inventory now stands at nearly three years of stock. Moreover, interest rate cuts are improving affordability as well.
Several real estate experts believe that while the supply-demand balance is stabilizing, strong end-user interest, particularly in the mid to premium segments, is preventing a precipitous fall. A Reuters poll predicts a 6-6.5% price increase in 2025-26, spurred by robust demand from affluent buyers. Rents are predicted to rise even faster, by 7% to 10%, perhaps exceeding inflation.
In this scenario, the critical question is whether now is the best time to buy or if patience would result in better pricing. The answer depends on various factors like your target segment (budget vs premium), timeline, finance comfort level, and market appetite across several housing categories.
What’s Fueling the Slowdown in Housing Market?
- Past Surge, Now Stabilising
Between FY2022 and FY2024, housing prices saw a compound annual growth rate (CAGR) of around 14–26%, driven by robust demand and rising property realizations. With that peak behind, prices are leveling off.
- Supply Outpacing Demand
Builders ramped up new construction to meet the rising demand. With supply now outpacing demand, inventory levels have slipped upward to 2.9–3.1 years of unsold stock. This declining leverage tempers price escalation.
- Premium Segment Momentum
The high-end and luxury residential segments continue to lead. In metro cities, launches in this category rose from 9% in 2020 to nearly 37% in 2024, with forecasts suggesting 38–40% share in 2025–26. This shows strong appetite even when overall growth softens.
4. Policy Support
Despite a 50-basis-point repo rate cut, home lending rates have stayed high. Still, these cuts make buying more affordable, especially for first-time buyers.
Should You Buy Now or Wait?
With a consistent demand-supply gap in urban areas, increasing input costs, and inflation-adjusted pricing, the chances of a major price drop are minimal. While waiting might seem like a safe bet, it could also mean missing out on current rates, especially in high-demand micro-markets. Here are a few factors that can help guide your decision:
Buy Now If:
Loan Rates are Manageable: A modest correction in interest rates and relatively steady EMIs can enable homeowners to lock in current prices and build equity over time.
Your Personal Timeline Aligns: If you plan to stay in the property for at least 5–7 years, gradual price appreciation may cover short-term fluctuations.
Your Target Segment is Premium or Luxury: These brackets are expected to outperform in terms of both demand and appreciation over the next few years.
When Waiting Might Pay Off:
You’re Budget-Conscious: Limited affordable and mid-level supply may lead to marginal price corrections or slower demand absorption in these segments. A wait-and-watch approach could pay off.
You’re Sensitive to Entry Costs: If your finances are stretched and you’re unsure about rate cuts or price trajectories, pausing might help avoid being at the higher end of the market.
Key Takeways
| Your Profile | What Makes Sense |
| Investor (5–10 years) | Buy now because of steady returns and premium demand |
| First-Time Buyers | Affordable potential may improve. Watch for new launches |
| Short-term Flipper | Consider waiting. Slower market may narrow margins |
| Luxury Homebuyers | Current market still supports premium purchases |
Conclusion
Housing prices in FY2025–26 aren’t soaring, but they’re not retreating either. 4–6% growth in property values and 5–7% in sales volume indicate a maturing yet stable market. For long-term investors and luxury homebuyers, entering now offers a strong foundation. First-time or budget-centric buyers may benefit from a moderated market outlook, provided they secure attractive deals.
In conclusion, whether to buy or wait depends on your timeline, segment, and risk appetite. But one thing is for sure that today’s steady growth beats yesterday’s overheat and tomorrow’s uncertainty.
