India Housing Market 2025: Home Sales Fall, Property Values Rise on Luxury Demand
India’s USD 500-billion real estate market witnessed a clear divergence in 2025, as new home sales volumes declined for the second consecutive year while overall transaction values continued to rise. High property prices weakened affordability, leading to a 14 percent drop in unit sales, even as developers benefited from price appreciation across major urban markets.
Despite the slowdown in volumes, the total value of housing sales grew by 6 percent, supported by rising prices and a strategic shift by developers toward premium and luxury housing. This trend reflects a changing market structure, where profitability and margins are increasingly driven by high-end residential projects rather than mass housing.
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Buyer behaviour has become sharply divided. Luxury homes continue to attract ultra-high- net-worth individuals and aspirational buyers, while demand in the affordable and mid- income segments remains under pressure. Limited availability of homes priced below Rs 1 crore and elevated land costs have further constrained supply for budget-conscious buyers.
Industry stakeholders are now looking ahead to 2026 with cautious optimism. Expectations of lower home loan interest rates, stable GDP growth, and potential tax relief in the upcoming Union Budget are seen as key triggers for a demand revival. Developers are also seeking revisions in the affordable housing definition and faster policy support to unlock mass housing growth.
While residential real estate faced headwinds, commercial real estate delivered strong performance in 2025, attracting record institutional investments. Robust demand for office spaces, warehousing, and retail assets strengthened overall investor confidence, positioning Indian real estate for calibrated growth as economic conditions and monetary policy turn more supportive.
