Premium housing rises in 2025 as affordable sales fall 17%: Knight Frank

Premium homes above Rs 1 crore captured half of all residential sales in 2025, even as affordable housing saw a 17% YoY drop, signalling a structural shift in India's housing market

India’s housing market is undergoing a decisive shift, with premium homes tightening their grip on sales even as affordable housing loses ground, according to a Knight Frank report.

 

The report, ‘India Real Estate: Office and Residential Market H2 2025’, further highlighted that homes priced above Rs 10 million (Rs 1 crore) accounted for half of all residential sales in 2025, underlining a structural pivot towards higher ticket sizes. While overall sales remained largely stable at 348,247 units during the year, down 1 per cent year-on-year, demand at the lower end fell sharply.

 

The report underscores that the deceleration is largely concentrated in the lower ticket-size segments. Annual sales in the Rs 5–10 million category fell 8 per cent year-on-year, reinforcing the weakness at the entry and mid-income levels. As a result, homes priced above Rs 10 million now account for a dominant share of transactions, while affordable housing has receded to a significantly smaller portion of overall sales across India.

   

The divergence is particularly visible in Delhi-NCR, where overall residential sales declined 9 per cent year-on-year. Within the region, affordable housing bore the brunt of the slowdown, with sales in the segment plunging 25 per cent. Mumbai remained the largest market, clocking 97,188 units in sales in 2025, up 1 per cent year-on-year. Bengaluru recorded flat growth at 55,373 units, while Pune saw a 3 per cent decline to 50,921 units.

 

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said the divergence between premium and affordable housing signals a deeper structural change in the market.

 

“The overall residential market continues to exhibit underlying resilience, supported by a stable macroeconomic backdrop and recent repo rate cuts. However, the affordable housing segment faces pronounced pressures, with demand declining 17 per cent year-on-year and supply contracting more sharply by 28 per cent year-on-year. This divergence signals a structural shift in the market, as capital allocation and buyer preference increasingly gravitate towards higher-value homes. The marked slowdown in new affordable launches highlights developers’ reluctance to commit capital to this segment, as they focus on premium housing, which is shaping the current housing cycle.”

 

In 2025, the affordable housing segment also grappled with a pronounced supply squeeze as developers increasingly shifted focus away from lower-ticket projects. New launches in the sub-Rs 5 million category declined 28 per cent year-on-year, while supply in the Rs 5–10 million bracket fell 9 per cent.

 

The sharp pullback in fresh launches led to a 7 per cent contraction in unsold inventory in the sub-Rs 5 million segment, even as the broader residential market continued its structural pivot towards premiumisation.