Will festive season bring cheers to India's housing sector after 3 weak quarters?

After three straight quarters of decline, India’s housing market is pinning hopes on the ongoing festival season to revive sales momentum.

While 2025 may still end with sales volumes below 2024 levels, developers believe the seasonally strong October-December quarter could narrow the gap, aided by stable interest rates, festive incentives, and resilient demand in the premium segment.

According to Anarock, housing sales in Q3 2025 dropped 9 per cent year-on-year (Y-o-Y) to 97,080 units, even as total sales value rose 14 per cent to around Rs 1.52 trillion, reflecting a shift towards higher-value homes. In Q1 and Q2 of 2025, sales had fallen 28 per cent and 20 per cent Y-o-Y, respectively.

“We may see a more muted pace compared to 2024, primarily because this year has witnessed the convergence of multiple macroeconomic and geopolitical challenges.

"While housing sales have declined over the past three quarters, the residential market has displayed marked resilience,” said Santhosh Kumar, vice-chairperson, Anarock Group.

He added that the festive quarter typically contributes around 35 per cent of annual housing sales.

“We can expect a sales boost in the ongoing festival quarter as the underlying fundamentals and buyer confidence remain strong,” he said.

Sanjay Daga, chief executive officer and managing director (MD) of Anex Advisory, said that given the persistent decline in sales and weak quarter-on-quarter momentum, volumes in 2025 are likely to remain below 2024 levels.

In 2024, housing sales across the top seven markets had already declined 4 per cent Y-o-Y to 459,000 units.

Daga said that while festive offers and new launches could lift sentiment, the momentum would likely remain modest.

“The seasonal boost may not be enough to offset the year’s overall decline.

"Many buyers are still assessing options that fit their budget and preferences,” he said.

Still, developers remain optimistic that the extended festival calendar — with Navaratri, Dussehra, and Diwali falling earlier this year — could help front-load demand.

“While it may not fully offset the slowdown, the current momentum offers a real opportunity to recover a significant part,” said Amit Jain, chairman and managing director at CMD, Arkade Developers.

Maulik Sheth, MD at Sheth Realty, echoed, noting that the festival season had always been developers’ saving grace.

“Sixty-five per cent of potential homebuyers are seriously considering property investments this festival season, up from 45 per cent last year,” he added.

To attract buyers, developers are offering gold coins, white goods, flexible payment plans, waived stamp duty, and cash discounts of Rs 100-200 per sq ft, along with customised EMI options.

Sanjay Dutt, MD and CEO of Tata Realty and Infrastructure, said the approach was shifting from outright discounts to value-added incentives.

“We are prioritising flexible payment plans like the 10:20:30:40 scheme, alongside premium add-ons such as zero GST, modular kitchens, or fully furnished options,” said Dutt.

Developers say sentiment has improved thanks to stable interest rates, banks gradually passing on the benefits of earlier Reserve Bank of India rate cuts, income-tax relief, and goods and services tax (GST) rationalisation. Anarock expects a 15-20 per cent uptick in sales during the festival period.

Manan Shah, MD, MICL, agreed that stable rates are sustaining sentiment.

“Affordability pressures are real, yet consumer sentiment remains cautiously optimistic, driven by improving incomes and the cultural significance of buying during festivals.

"Buyers are increasingly value-conscious, prioritising trusted brands and lifestyle-centric offerings,” he said.

In Q3 of 2025, average residential prices rose 9 per cent Y-o-Y to Rs 9,105 per sq ft, led by the National Capital Region with 24 per cent growth and Bengaluru with 10 per cent.

Even as affordability remains a concern, developers are confident that strong sentiment and attractive offers will drive transactions.

Dhaval Ajmera, director (corporate affairs) of Ajmera Group, said strong consumer sentiment, festival offers from developers and banks, and a surge in site visits could together create real momentum for the sector.

If festival sales fall short of expectations, industry voices anticipate a period of recalibration.

“In that case, developers may need to focus on targeted launches, flexible payment options, and value-driven propositions to sustain buyer interest,” said Arkade’s Jain.

Sheth cautioned that the sector’s growing dependence on luxury housing could limit overall participation.

For now, the industry remains cautiously optimistic.

Nikunj Sanghavi, treasurer, Credai-MCHI, said the festival season traditionally drives 25-30 per cent of annual sales in Mumbai Metropolitan Region.

“While it may not completely offset the moderation seen in Q1-Q3, the festival period should help narrow the gap and provide a positive close to the year,” said Sanghavi.

On the other hand, NCR-based Gautam Kanodia, founder of Kreeva and Kanodia Group, believes the slowdown is not a structural weakness but a recalibration after years of extraordinary growth.

Deepak Kapoor, director, Gulshan Group, added that NCR sales have softened this year, but real estate is always cyclical and the festive season often resets the market mood.

Meanwhile, NCR-based Gautam Kanodia, founder of Kreeva and Kanodia Group, believes the slowdown is not a structural weakness but a recalibration after years of extraordinary growth.

Deepak Kapoor, director at Gulshan Group, said that NCR sales have softened this year, but real estate is cyclical and the festive season often resets market sentiment.