India's residential property market exhibited notable resilience in 2025, yet a pronounced divergence emerged between premium and affordable housing segments. According to a recent report from Knight Frank India, total housing sales reached 348,247 units, reflecting a slight year-on-year decline of 1%. However, the premium housing sector, defined as properties priced above Rs 10 million, experienced a significant 14% increase in sales. This shift indicates a structural change in buyer preferences, with premium homes now comprising 50% of annual sales, highlighting the ongoing trend towards 'premiumisation' within the market.
In stark contrast, the affordable housing segment, which encompasses properties priced below Rs 5 million, faced substantial challenges. Sales in this category plummeted by 17% year-on-year, with new launches in the sub-Rs 5 million sector dropping by 28%. This decline points to a cautious approach from developers, who are increasingly hesitant to invest in lower-priced projects amid tightening supply conditions. Shishir Baijal, International Partner and Chairman at Knight Frank India, noted that while the overall market remains resilient, the affordable segment is under significant pressure due to declining demand and a sharp contraction in supply.
City-level analysis reveals varying trends across major metropolitan areas. Mumbai retained its position as the leading market, with sales of 97,188 units, a marginal increase of 1% year-on-year. Bengaluru saw stable performance with 55,373 units sold, while Pune experienced a 3% decline to 50,921 units. The National Capital Region (NCR) struggled more acutely, reporting a 9% drop in sales, with the affordable housing sector contracting by 25%. Conversely, Hyderabad emerged as a standout performer, boasting a 12% increase in sales with 18,262 units sold, signaling a potential shift in demand dynamics.
The inventory landscape further underscores the divide between housing segments. Unsold stock in the sub-Rs 5 million category decreased by 7% year-on-year, totaling 176,903 units, primarily due to reduced new launches rather than an uptick in demand. The quarters-to-sell (QTS) metric for affordable housing stood at 8.7, indicating a slower pace of inventory clearance compared to higher-priced segments. Overall, Knight Frank India reported a 3% year-on-year decline in total launches, reaching 362,148 units. This slowdown in the affordable housing market can be attributed to various factors, including affordability issues, increasing input costs, and developers facing tighter margins, which collectively contribute to a challenging environment for low-cost housing options in India.