Home sales volumes eased during FY25, yet overall revenue collections got better
Updated on IN The financial year 2025 saw a noticeable dip in the volume of home sales across the country. Initial figures suggest a slowdown compared to the previous year, with analysts pointing to a number of contributing factors. Rising interest rates, which made mortgages more expensive, played a significant role in cooling down buyer…
The financial year 2025 saw a noticeable dip in the volume of home sales across the country. Initial figures suggest a slowdown compared to the previous year, with analysts pointing to a number of contributing factors. Rising interest rates, which made mortgages more expensive, played a significant role in cooling down buyer enthusiasm. Affordability concerns also persisted, particularly in major metropolitan areas where property prices remained stubbornly high despite the overall market adjustment.
Several regions experienced more pronounced declines than others. Areas that previously saw rapid price appreciation during the pandemic-fueled boom witnessed the most significant corrections. This suggests a return to more sustainable levels after a period of unprecedented growth. First-time buyers, often the most sensitive to economic fluctuations, appeared to be particularly hesitant, further contributing to the reduced sales volume.
Furthermore, a limited supply of desirable properties also played a role. While the total number of homes on the market may have increased in some areas, many potential buyers found themselves unable to find properties that met their specific needs and preferences. This mismatch between supply and demand further constrained sales activity. This created a bottleneck, hindering the recovery of sales volumes to previous levels. The impact of these factors varied across different segments of the housing market, with luxury properties showing more resilience than entry-level homes.
Revenue Collections Improve
Despite the fall in the number of properties sold, overall revenue from home sales demonstrated a positive trend during FY25. This seemingly contradictory situation stems from a number of factors, primarily driven by the continued strength of property values in certain market segments and strategic shifts in the types of properties being sold.
One key driver of increased revenue was the higher average selling price of homes. While sales volumes decreased, the value of individual properties remained relatively robust, particularly in prime locations and for larger, more luxurious homes. This suggests that while fewer people were buying, those who were in the market were often purchasing higher-value properties, contributing to a greater overall revenue yield. Developers also focused on completing and selling higher-end projects, capitalising on the demand for premium properties.
Another factor contributing to the increased revenue was the change in the mix of properties sold. There was a noticeable shift towards sales of new constructions and developments, which often command higher prices than existing homes. This can be attributed to the availability of modern amenities, energy-efficient features, and customisation options that appeal to a segment of buyers willing to pay a premium. Government incentives and policies aimed at promoting new housing developments also played a role in boosting sales in this category.
Strategic pricing and marketing efforts by real estate companies also contributed to the improved revenue collections. Many firms adopted targeted marketing campaigns to attract high-net-worth individuals and investors, showcasing the long-term value and potential returns of investing in premium properties. By focusing on specific demographics and highlighting the unique selling points of their properties, these companies were able to maintain healthy profit margins despite the overall slowdown in sales volume. They also used data analytics to identify optimal pricing strategies and adapt to changing market conditions, ensuring they maximised revenue potential.