Buying a home is one of the most important financial decisions most of us make. Timing that purchase correctly can mean significant savings, better loan terms, and greater peace of mind. But with markets shifting and interest rates moving, it’s natural to wonder: is now the right time to buy? In this guide, we’ll look at the latest trends in India’s housing market, dig into pricing and inventory data, explore recent changes in mortgage rates, and weigh the pros and cons so you can make an informed decision.
1. Current Market Overview
After a strong rebound in the years following the COVID‑19 downturn, India’s residential real estate market entered FY 2024‑25 with a slight moderation in sales volumes. According to India Ratings and Research, overall bookings in tier‑1 cities eased compared to the previous year, even as collections from existing projects remained healthy—a sign that buyers are becoming more selective and developers are tightening project finances .
At the same time, broader economic stability and improving consumer confidence have kept sentiment steady. While fewer homes may be changing hands, those that do are often at higher ticket sizes, reflecting a shift toward premium and mid‑segment properties in many urban markets.
2. Price Trends in Major Cities
Bengaluru Leads the Pack
Over the five years through early 2025, Bengaluru recorded the highest price appreciation among India’s big seven cities—an astonishing 79% jump in home values . Strong IT hiring, infrastructure projects like the metro expansion, and limited land availability continue to fuel demand here.
Mumbai’s Mixed Picture
Mumbai’s FY 2024‑25 home sales hit a record 49,191 units—up 26% year‑on‑year—driven largely by the more affordable suburbs such as Jogeshwari‑Borivli, where sales soared 39% . However, South Mumbai still commands premium rates (around ₹1.8 lakh per sq ft), and unsold inventory remains high at over 84,000 units, suggesting pockets of over‑supply despite robust demand.
Tier‑II/III Cities on the Rise
Post‑pandemic migration trends and government incentives have sparked fresh interest in Tier‑II and III cities like Indore, Lucknow, and Surat. Improved infrastructure, lower price points, and growing local job markets are drawing buyers away from metro crowds.
3. Interest Rates & Home Loan Costs
Repo Rate Cuts Make Borrowing Cheaper
On June 6, 2025, the RBI slashed its policy repo rate by 50 basis points—from 6.00% to 5.50%—marking the third cut in six months as the central bank shifts to a “neutral” stance. Banks have responded quickly, lowering their lending rates and passing on the benefit to homebuyers.
Home Loan Rate Reductions
Major public and private sector lenders have trimmed their External Benchmark Lending Rates (EBLR) and Marginal Cost of Funds-based Lending Rates (MCLR) by up to 0.50% post‑RBI cut. For instance, SBI cut its EBLR‑linked home loan rates to a range of 7.50–8.45% based on borrower credit profiles , while other banks have similarly reduced their best‑in‑market offerings.
What This Means for Your EMI
Lower rates translate directly into reduced EMIs or the ability to shorten your loan tenure without increasing monthly payments. Even a 0.25% rate drop can save tens of thousands over the life of a typical 20‑year home loan.
4. Supply & Inventory Dynamics
India’s housing market in early 2025 shows a tale of two extremes:
- Affordable Housing (<₹40 lakh): Unsold inventory in this segment fell by 19% year‑on‑year in Q1 2025, as developers and buyers rekindled interest after a pandemic‑induced freeze. Bengaluru led this revival, with a 51% drop in unsold units.
- Luxury Housing (Above ₹1.5 crore): Contrastingly, luxury projects saw a 24% rise in unsold stock, indicating that high‑end buyers are more cautious amid evolving market conditions.
This polarization suggests that while entry‑level segments are tightening, premium projects may offer better negotiation leverage due to higher inventories.
5. Buyer Sentiment & Affordability
Rising Home Prices vs. Wage Growth
Home prices in major Indian cities are forecast to climb around 6.5% in 2025—outpacing average inflation and putting pressure on affordability for first‑time buyers. With wage growth still lagging, many middle‑income families find it harder to accumulate down-payment funds.
Rental Market Pressures
As property prices rise, urban rents are also up by an estimated 7–10% in 2025. This surge is prompting tenants to rethink long‑term homeownership as a way to lock in monthly housing costs and build equity over time.
Psychological Factors
Low interest rates and a perception that “the market can only go up” are encouraging some buyers to act now, while others remain on the sidelines, fearing over‑valuation or potential macroeconomic shocks.
6. Weighing the Pros & Cons
| Pros of Buying Now | Cons of Buying Now |
| Lower interest rates → reduced EMIs | Price appreciation may moderate further |
| Healthy developer collections | Unsold luxury inventory remains high |
| Government incentives for affordable homes | Wage growth lagging behind price rises |
| Potential rental savings | Market sentiment still cautious |
7. Practical Tips for Aspiring Buyers
- Pre‑Approval First
Secure a home loan pre‑approval to lock in current rates and clarify your budget. - Research Neighborhoods
Compare price trends, upcoming infrastructure projects, and local amenities. - Negotiate on Inventory‑Heavy Segments
If you’re eyeing a premium project with high unsold units, you may secure better price discounts or freebies. - Factor in All Costs
Remember stamp duty, registration fees, and maintenance charges when calculating your total outlay. - Check Builder Credentials
Verify project approvals, track record, and financial health to avoid delays and quality issues. - Be Flexible on Timeline
If rates drop further or prices correct, a 3–6 month buffer can save you money and stress.
Conclusion
So, is now the right time to buy a house? If you have a stable income, adequate savings for a down-payment, and are ready for long‑term commitment, the current environment—with repo rates at a five‑year low and competitive home loan offerings—presents a strong case for buying. However, if affordability is stretched or you prefer waiting for further market clarity, it might be prudent to watch trends for the next few quarters. Ultimately, the “right time” is when your personal finances and life plans align with market conditions.
Source : thepumumedia.com