India’s housing market witnessed its first decline in new home sales since the pandemic, as soaring housing prices and high borrowing costs dampened buyer enthusiasm in 2024. After three consecutive years of robust growth, the real estate sector is now pinning its hopes on the upcoming Union Budget for policies that could revive demand and stimulate growth.

Industry experts attributed the slowdown to a combination of factors, including a high base effect from the previous year, reduced supply of new homes, and price escalations that pushed homes beyond the reach of many buyers.

Anuj Puri, Chairman of Anarock, a leading real estate consultancy, described 2024 as a “mixed bag” for the residential market. “While demand for affordable housing remained weak, luxury housing sales and launches continued to show resilience,” he noted.

The affordable housing segment, traditionally a key driver of the market, has been particularly affected by rising interest rates and economic uncertainties, leaving buyers hesitant. Meanwhile, the luxury segment thrived, buoyed by high-net-worth individuals and NRIs seeking premium properties.

Real estate developers and stakeholders are looking to the Union Budget for incentives such as interest rate subsidies, tax relief, and measures to boost housing affordability, which could play a crucial role in reversing the downturn.

With the Budget expected to be announced in February, all eyes are on the government’s plans to rejuvenate the housing sector and address the challenges facing homebuyers and developers alike.