Trump’s tariff turmoil hits Indian housing; sales dip 20% as prices soar

The Indian housing market is grappling with a sharp downturn in sales, mounting price pressures, and deepening buyer hesitancy- all unfolding against the backdrop of fresh global turbulence triggered by US President Donald Trump’s new 25% tariffs.

According to data from real estate consultancy Anarock, residential sales in India’s top seven cities slumped 20% in the second quarter of 2025, falling to just 96,285 units from 120,335 a year ago. The drop marks one of the steepest quarterly declines in recent times and underscores the growing uncertainty faced by homebuyers and developers alike.

Read more: Residential prices witness up to 27% spike in Q2 2025 YoY, NCR leads

Anuj Puri, Chairman of Anarock Group, attributed the decline to a mix of external shocks and internal market dynamics. “Indian real estate weathers unrelenting turbulence as the sentiment is pressured by Trump’s new 25% tariffs and a notable 20% plunge in housing sales across top metros,” Puri noted.

He warned that the ongoing trade tensions, coupled with inflationary headwinds, could prolong the market's recovery unless there is policy intervention.

The most immediate fallout of the tariff war is being felt in the affordable housing segment, long touted as the backbone of India's real estate growth. With micro, small and medium enterprises (MSMEs), a major demand base for affordable housing, bearing the brunt of global trade disruptions, interest in budget homes has waned considerably.

Read more: India's residential market sales witness upward trend in Q2 2025, led by luxury housing segment

Compounding the situation is the Reserve Bank of India’s recent decision to maintain the repo rate at 5.5%, a move that dashed hopes for cheaper home loans. “A rate cut would have particularly boosted the affordable housing segment, which has been under considerable pressure in recent years,” Puri added.

India's residential market has witnessed a massive price hike in the second quarter of 2025, as per the consultants Anarock's 'Pan India Residential Market' report.

According to the recent data from Anarock, the residential prices in India's top 7 cities, which include NCR, MMR, Bengaluru, Pune, Hyderabad, Chennai, and Kolkata, hiked up to 27 percent in Q2 2025. Notably, the annual growth of 11 percent was recorded, from Rs 8,070 per square foot in Q2 2024 to Rs 8,990 per sf in Q2 2025. Among the top 7 cities, NCR and Bengaluru recorded the highest annual price jump of over 27 percent and 12 percent, respectively, driven by increased luxury, ultra-luxury supply, and robust housing demand.

The average base selling price per square foot in NCR stands at Rs 8,650 per sq ft, and in Bengaluru at Rs 8,720 per sq ft. According to the report released last month, an upward demand trend was seen for luxury and premium housing segments, with a growing interest in the ultra-luxury category.

Read more: MMR dominates India’s land market in H1 2025, Bollywood and data centres steal the spotlight

The surge has attracted an increasing number of national and international brands entering the market to capitalize on rising demand. In Q2 2025, the supply share of luxury (Rs 1.5 crore – Rs 2.5 crore) and ultra-luxury (above INR 2.5 Cr) housing grew by 15 percent and 3 percent year-on-year, respectively, across the top 7 cities. Luxury homes priced between Rs 1.5 crore and Rs 2.5 crore led the market, accounting for 27 percent of the total supply in Q2 2025. This was followed by the high-end segment (Rs 80 lakh – Rs 1.5 crore) and mid-end segment (Rs 40 lakh and Rs 80 lakh), each contributing 21 percent. The ultra-luxury segment made up 19 percent of the overall supply.

Despite the current volatility, Puri remains cautiously optimistic. He believes the upcoming festive season may inject some energy into the market. “Homebuyers are currently driven by long-term confidence rather than short-term rate fluctuations. Developers may look to keep the momentum going with offers and flexible payment plans, which could improve affordability for genuine buyers,” he said.