The residential market in India demonstrates resilience, buoyed by a stable macroeconomic environment and recent repo rate cuts, as per a recent report. Premium housing segments, priced at Rs 1 crore and above, now account for half of the total annual sales in the country. While the overall market saw 3,48,207 units sold in 2025 and a 14% YoY increase in sales of units priced over Rs 1 crore, affordable housing witnessed a notable 17% YoY decline in the same period.
The report, covering the second half of 2025 by Knight Frank India, highlights that the slowdown is primarily observed in lower-priced segments. Consequently, homes priced above Rs 1 crore have taken precedence in the market, overshadowing affordable housing sales across India. This shift is particularly noticeable in cities like Delhi-NCR, according to the report.
Shishir Baijal, International Partner, Chairman, and Managing Director of Knight Frank India, noted that the affordable housing segment is under pressure, with demand falling by 17% YoY and supply shrinking by 28% YoY. This divergence signifies a structural change in the market, with a growing inclination towards higher-value homes by both buyers and capital allocation. Developers are showing reluctance to invest in affordable housing, focusing more on premium housing projects, shaping the current housing cycle.
In 2025, the affordable housing sector faced a significant supply shortage as developers moved away from lower-priced projects, resulting in a 28% YoY decrease in new launches for units priced under Rs 50 lakh and a 9% decline in the Rs 50 lakh–Rs 1 crore category. This lack of fresh supply led to a 7% reduction in unsold inventory in the sub-Rs 50 lakh segment, amidst a broader market shift towards premium housing, according to the report.
