In 2025, South India’s real estate market held its course with measured, consistent growth. The region absorbed new supply without losing momentum, supported by resilient demand across its major urban centres.
Expanding tech corridors, diversified economies, and steady infrastructure development continued to drive activity through the year.Bengaluru continued to lead on both volume and value, while Hyderabad and Chennai recorded healthy sales growth. Tier-II cities, including Coimbatore, Mysuru, and Kochi, also maintained steady appreciation. This pattern indicates a maturing market, where performance hinges on delivery, transparency, and sustained buyer confidence.
Bengaluru: Volume leadership backed by tech demand
Bengaluru remained at the centre of the South’s real estate momentum. In Q1 2025, the city recorded sales of around 15,000 units against an inventory of 58,700 units — translating to an 11-month inventory overhang. Prices in key micro-markets rose 6–10% year-on-year, with Whitefield moving from ₹7,600–9,200 per sq. ft. in 2024 to ₹8,500–10,500 in 2025.
This growth was anchored in genuine end-user demand, supported by continued IT/ITeS expansion, suburban rail progress (37% underway), and infrastructure projects such as the Peripheral Ring Road. High-value transactions above ₹1.5 crore made up 28–32% of Q1 bookings, up from 22–24% in 2024. Builders focused on ready-to-move gated enclaves with IGBC-certified designs and smart, energy-efficient layouts. Even as new launches dipped 26% quarter-on-quarter in Q2, the emphasis on completion over volume kept absorption firm and sentiment positive.
Hyderabad and Chennai: Velocity meets value
On the other hand, Hyderabad registered a 53% jump in sales volume by Q3, while Chennai reported 12% year-on-year unit growth and an 88% surge in Q1 registrations, crossing 8,000 homes. In Hyderabad, transactions for properties priced above ₹1 crore rose 12% in January alone, highlighting steady demand for spacious, amenity-rich homes in western suburbs. Chennai’s metro-linked pockets saw 4–6% gains in rental and capital yields, aided by Phase-2 metro progress (22 stations operational) and growing electronics manufacturing hubs.
Tier-II Cities: Value growth amid selective moderation
Beyond the metros, Tier-II markets such as Coimbatore, Mysuru, and Visakhapatnam continued to attract both families and investors with better access and relative affordability. Although Q1 regional volumes eased 8%, transaction values rose 6% to ₹40,443 crore, signaling an upgrade in buyer preferences within the mid-segment.
Coimbatore’s Vilankurichi plots saw a 24.7% annual rise, with Peelamedu and Saravanampatti averaging ₹4,900–9,450 per sq. ft. Mysuru and Mangaluru posted 12–20% gains, driven by tourism, industrial growth, and emerging IT clusters. Developers focused on mid-segment communities with sustainable designs, favouring livability over density.
Thiruvananthapuram emerged as the leading residential market in Kerala, surpassing Kochi on the back of strong demand from the expanding IT ecosystem and the operationalization of the Vizhinjam port. Kochi, meanwhile, is poised for renewed momentum with the upcoming Lulu Twin Towers set to revitalize its IT infrastructure. Kozhikode continued its premiumization trend, with residential rates moving up from ₹4,500–6,500 per sq. ft. to ₹7,500–9,500 per sq. ft., reflecting heightened interest in upscale urban living.
Moderation and market resilience
The second half of 2025 saw a more balanced pace. Global rate cues, Karnataka’s A-Khata processing delays, and policy discussions such as Tamil Nadu’s stamp-duty revisions brought measured caution. Yet, South India continued to hold steady. While national sales softened, the region-maintained momentum — Hyderabad recorded 11,305-unit sales in Q3, and Chennai’s launches rose 38% year-on-year. Bengaluru’s inventory remained stable at 58,900 units in Q2, while Tier-II absorption improved 5–6% annually. Developers concentrated on timely delivery, flexible payment options, and ESG-aligned practices, using a cautious phase to consolidate strength.
Key themes that defined 2025
Premium housing set the tone for the year, with luxury homes (₹4 crore+) rising 28% nationally — much of it led by demand from the southern markets for larger homes with better amenities. Urbanisation deepened across Tier-II cities through new highways and metro extensions, while RERA compliance strengthened buyer trust. In Kerala, the expansion of National Highway 66 has emerged as a key infrastructure catalyst, driving connectivity and accelerating real estate value appreciation along its corridor.
Infrastructure continued to anchor growth - Hyderabad’s Regional Ring Road achieved 42% land acquisition, and Chennai’s office space approached the 100-million-sq-ft mark expected by 2026. These developments not only opened new corridors but also supported employment. Sustainability became central to design philosophies, reflected in 48 IGBC Platinum-rated project launches across Bengaluru (56), Hyderabad (29), and Chennai (26).
Outlook 2026: Sustained execution ahead
Concludingly, the year 2025 affirmed the sector's maturity ,with growth now gauged in trust, sustainability , and premium value, instead of just volumes or hikes. Moving ahead in 2026 , South India’s real estate stands on a robust footing. Developers are pivoting from launches to on-time delivery, efficient capital use, and green innovation. The policy ecosystem must align with this resilience - streamlining approvals, easing regulations, and accelerating infrastructure to prevent bottlenecks.
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