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India's residential housing market in 2025 showed a clear shift towards higher-value homes, with premium properties priced above INR 1 crore making up about 50 % of total annual sales, according to a Knight Frank India report on the real estate sector. In contrast, sales of affordable homes defined as those priced under INR 50 lakh fell roughly 17 % year-on-year, reflecting weaker demand and limited new launches in the lower ticket categories. The overall market remained broadly stable in volume terms, but mid- and lower-tier segments recorded contraction, while higher-end homes recorded moderate growth. Analysts said the divergence points to structural realignment in buyer preferences and developer focus amid macroeconomic strength and affordability challenges in key cities. The trend was evident across major urban centres including the National Capital Region, Mumbai and Bengaluru.
India's residential property market in 2025 experienced a pronounced shift in buyer preferences and sales patterns, with premium housing segments strengthening their lead while the affordable housing segment contracted, according to a recent Knight Frank India report on the residential market. Advertisement
Homes priced above INR 1 crore now represent around 50 % of all residential sales, marking a significant contribution from higher-value properties to total annual transactions. Sales of premium homes grew by about 14 % year-on-year (YoY), even as overall market volumes stayed relatively resilient. This trend underscores strong demand in higher ticket-size categories, supported by underlying economic stability, recent policy measures and persistent interest from established homebuyers in key urban centres.
In contrast to the buoyancy at the top end of the market, the affordable segment, comprising homes priced below INR 50 lakh, saw a 17 % decline in sales in 2025 compared to the previous year. The slowdown in the entry-level segment was evident across several cities, particularly in the National Capital Region (NCR), where affordable sales declined sharply as overall residential transactions dipped. The smaller share of affordable sales has been attributed not only to weaker demand but also to a notable reduction in new launches in lower ticket categories, as developers shifted focus towards higher-valued projects with stronger margins.
The report also highlighted that the mid-tier segment homes priced between INR 50 lakh and INR 1 crore experienced an 8 % drop in sales, reinforcing the broad pattern of contraction in lower to mid ticket categories during the year. Lower new supply in these segments compounded the slower sales performance, with new launches in entry-level categories falling significantly.
City-wise trends varied, with major realty hubs such as Mumbai and Bengaluru maintaining sales momentum in premium categories, while overall volumes in some regions remained flat or slightly lower year-on-year. Hyderabad emerged as one of the faster-growing markets for higher-value homes, reflecting strong end-user demand.
Real estate analysts said the divergence between premium and affordable segments signals a structural market realignment. Developers appear to be prioritising projects with higher ticket sizes, while middle-income and first-time buyers face affordability challenges amid rising construction costs and limited supply of lower-cost housing options.
The evolving mix of housing demand suggests that while the overall residential market remains resilient, its composition is shifting towards higher-value properties, with implications for pricing, product strategies and long-term urban housing dynamics.
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