Feb 16: Knight Frank India, in its flagship report India Real Estate: Office and Residential Market H2 2025, highlighted a growing shift in the country’s residential real estate landscape. While overall housing sales remained resilient with 3,48,247 units sold in 2025, demand for higher-value homes strengthened, with sales of units priced over INR 10 million rising by 14% year-on-year (YoY). In contrast, the affordable housing segment—homes priced under INR 5 million—experienced a significant 17% YoY decline.
The report underscores that the slowdown is largely concentrated in lower-ticket segments, with sales in the INR 5–10 million category also declining by 8% YoY. Consequently, premium housing now accounts for 50% of total annual sales, reflecting a structural shift in buyer preference and capital allocation toward high-value properties.
Cities such as Delhi-NCR saw a marked impact, with overall sales declining 9% YoY and affordable housing dropping 25% YoY, while other metros like Mumbai, Bengaluru, and Pune showed mixed performance amid the market transformation.
Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said,
“The overall residential market remains resilient, supported by stable macroeconomic conditions and recent repo rate cuts. However, the affordable housing segment is under pressure, with demand down 17% YoY and supply contracting 28% YoY. Developers are increasingly focusing on premium projects, reflecting a market cycle driven by higher-value homes and shaping the current residential landscape.”
The report further notes that the affordable housing segment faced a supply crunch in 2025, with new launches under INR 5 million falling 28% YoY, and units priced INR 5–10 million declining 9% YoY. This reduction in fresh supply led to a 7% contraction in unsold inventory for sub-INR 5 million homes, even as the broader market increasingly gravitated toward premiumisation.
Knight Frank India’s findings indicate a clear market trend: while the residential sector remains robust, the focus has shifted decisively toward higher-ticket properties, with premium housing emerging as the key driver of sales growth and developer profitability in 2025.