Are Real Estate Bulls Fatigued?

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Cracks Yet To Appear In Real Estate Bull Run, But Resilience Will Be Tested In 2025

What?

India’s real estate market has seen some good years since the pandemic. In 2024, residential home sales crossed 3,00,000 units for the second consecutive year across the top seven cities, as per real estate agency CBRE.

Come 2025, the market is far from slowing, yet the bull run is not strong. As per Knight Frank data, sales in four of its top cities have fallen in the January-March quarter.

Data shows divergent trends across cities. While Kolkata and Hyderabad have softened, Pune and Chennai saw robust growth in sales in the first quarter of 2025.

The sales volume dip in NCR and Bengaluru also tell the story of strong price rise in the sector. Both these markets saw double-digit price growth on an annual basis, which might have contributed to the dip in volumes.

“A lot of them want to start talking about a downfall in real estate, but it hasn't yet been so visible. In NCR and Bengaluru, we are getting some sense of cracks appearing. These are again superficial because it's too soon to conclusively say that markets are changing even in those two cities,” said Ghulam Zia, senior executive director, research advisory, infrastructure and valuation at Knight Frank.

Housing-starved Mumbai, meanwhile, continued to grow. It saw an extreme resurgence in infrastructure with new metro lines, bridges and roads, which created new real estate markets and revived others.

Why The Divergence?

The pandemic has changed the dynamics of sales as well as inventory in real estate. While affordable homes priced between Rs 45 lakh to Rs 1 crore, which were once the most dominant category, have halved in overall sales, mid-end homes priced between Rs 1-2 crore have the most share in housing sales.

The high-end, premium and luxury homes have all been increasing their share in the total sales since the pandemic.

A few real estate experts point out that the bull run in luxury sales, too, might see signs of unwinding in the coming months.

Supply, however, seems to be expanding extensively.

Will the real estate market stabilise after dizzying growth in the last three years?

MESSAGE FROM BILL

BUILD ON BLOCKCHAIN

Verify Once, Access Anywhere

Crowded and complex — these two words accurately describe the Indian financial system.

Crowded because there are several banks, non-banking financial institutions (NBFCs), and financial institutions operating in the same space, and complex because there are plenty of rules, regulations, and processes that are difficult to understand and follow.

The drive for change has nudged institutions and regulators to work on modernising and upgrading to reduce the complexities and bring in more efficiency.

This drive for improvement has also nudged them to explore blockchain that prioritises transparency and maintains the integrity and safety of all recorded data.

First Steps

For example, in 2021, India’s markets regulator, Securities and Exchange Board of India, directed the country’s central securities depositories NSDL and CDSL to use distributed ledger technology (blockchain) to maintain asset records related to bonds and debentures, as its decentralised system offers better protection against cyber attacks.

Likewise, the central bank, the Reserve Bank of India, made its first step towards integrating blockchain into the country’s financial system by launching the digital rupee in 2022, in order to make the inter-bank market more efficient.

It’s encouraging to see that the first few steps towards changing the system — with the help of blockchain — at the macro level have been taken already.

How could blockchain help the know your customer process and make things tamper proof?

This series is brought to you in partnership with Algorand. 

—📦🤝 India, UK Sign Landmark Trade Pact. India and the UK have finalised a long-awaited free trade deal that slashes tariffs and promises to boost annual trade by £25.5 billion by 2040, according to a BBC report. The pact — sealed after three years of negotiations — will halve duties on UK whisky and lower levies on cars, aerospace and food products. In return, Indian clothing and footwear exports will face reduced taxes. However, no changes were made to UK immigration rules, including for Indian students. The agreement comes as both countries brace for potential global trade turbulence amid US tariff threats.

—🛑🛒 Distributors v/s Colgate. Colgate-Palmolive is facing a revolt. The All India Consumer Products Distributors Federation (AICPDF) said on Tuesday that it will suspend purchases in Maharashtra from May 12, protesting “predatory” 50–60% discounts on Blinkit, Zepto, and Instamart — undercutting distributor prices by 5–10% and gutting General Trade (GT) volumes. Distributors also allege GST violations, data misreporting in its central retail tracking software, and zero redressal from Colgate. “Our shelves are stocked, but nothing moves. Consumers see Colgate at half price on apps and walk out. It’s a slow death,” said a Kolhapur distributor.

—📈 Services Surge! India’s services sector showed modest growth in April 2025, with the services purchasing managers’ index (PMI) rising to 58.7 from 58.5 in March, driven by strong new business and export orders, especially from Asia, Europe, West Asia, and the US. The Composite PMI also edged up to 59.7, signalling the sharpest expansion since August 2024. The finance and insurance sectors led growth. Meanwhile, the index of industrial production (IIP) growth recovered to 3% in March, while FY25 output growth hit a four-year low. "New export orders gained momentum after taking a breather in March, accelerating at its fastest pace since July 2024,” said Pranjul Bhandari, chief India economist at HSBC.

—🔎 ChatGPT Under Threat? The Indian government has set up a panel to review whether the country’s existing legal copyright infrastructure is adequate for the AI age, according to a Reuters report. This announcement follows a Delhi high court case, in which a group of top Indian news outlets, including Gautam Adani-owned NDTV, filed a lawsuit against OpenAI for using their work to help train ChatGPT. OpenAI has denied any wrongdoing and said it only uses publicly available data, and even allows companies to opt out of the process. Courts across the world are currently adjudicating legal cases like this one.

The Sovereign Push Fueling India’s AI Aspirations with Payal Malik

In this episode, journalist Puja Mehra speaks to economist and competition law expert Payal Malik about India’s push to become an AI powerhouse. While India has advantages in data and digital talent, Malik argues that inadequate computing infrastructure, limited R&D spending, and over-reliance on big tech threaten to stall its progress.

They discuss how initiatives like AIRAWAT aim to build indigenous capacity, but without strong competition policy and sustained investment in innovation, India risks repeating past mistakes—ceding control of critical digital infrastructure to global giants. With countries like China far ahead in AI funding, Malik warns that unless India builds open, contestable markets and ramps up support for startups, its AI ambitions may remain just that—ambitions.

Tune in for analysis of the political economy shaping India’s AI future.

McKinsey & Co’s Noshir Kaka On Why India Must Harness The Power Of AI

Artificial intelligence (AI) is changing life as we know it, be it in its generative forms, such as DeepSeek or Chatgpt, or in the form of enabling other technologies.

At a time like this, when China is already harnessing AI in its factories for manufacturing, is India also in a position to win? Noshir Kaka, senior partner at Mumbai at McKinsey & Company told The Core, “Absolutely. Why? Because no matter what you may say, the underlying technology developed or depends on technical talent.”

One of the biggest concerns surrounding AI has been about how much it will take over human involvement in certain functions.

“Even though many people say that this is an industry, that this is a technology that actually does away with the need for that, I actually think if you look at all the coding stats, the amount of code that's now put into GitHub has doubled in the last year. Fifty percent of that is machine-led. But it doesn't mean that the human code has actually gone down or even decreased its scope of growth, right?,” Kaka said.

Kaka believes that every economy must harness the power of AI to have cutting-edge technology.

He said, “AI is essentially nothing but applied intelligence, right? And if you look at what it is now able to do, right, you are able to design the next chip faster. You are able to respond to a medical emergency better, right?”

What role do data and skills have to play in this mix?

On Episode 574 of The Core Report, financial journalist Govindraj Ethiraj talks to Indrani Bagchi, Chief Executive Officer, Ananta Centre as well as R.S. Sharma, the former Director General of the Unique Identification Authority of India (UIDAI), and current Chairperson of both ONDC and the Algorand India Advisory Board.

• The markets show surprising resilience

• Asian currencies are charting new and unexpected paths

• Build on Blockchain

• India and UK announce a much-delayed Free Trade Agreement, dramatic customs reductions in some products may be coming

• Indian apparel could be one of major beneficiaries of new UK FTA

👥 THE TEAM

✍️ Zinal Dedhia, Salman SH, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas