India’s residential property market is showing signs of moderation after a strong run, but the composition of demand is shifting sharply toward higher-value homes. Even as launches and sales growth slow in several cities, premium housing is accounting for an increasing share of transactions, according to the latest report by property consultancy Knight Frank India.
Homes priced above ₹1 crore made up 50% of total residential sales across the top eight cities in 2025, up from 44% a year earlier, the report said. The shift comes at a time when overall market activity has started to stabilise following a post-pandemic surge.
A total of 3,48,247 homes were sold in 2025, broadly steady compared with elevated levels seen in the previous year. Within this, 175,091 units were in the ₹1 crore-plus category, marking a 14% year-on-year increase.
The trend underscores how demand is increasingly being driven by financially stronger buyers upgrading homes, even as mass-market demand shows signs of strain.
“The fact that homes priced above ₹1 crore now constitute half of total residential sales is a defining milestone for the sector,” said Shishir Baijal, Chairman and Managing Director at Knight Frank India.
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“Demand is increasingly being led by financially secure end-users upgrading to better-quality homes. Improved affordability metrics, rising incomes and long-term urban confidence have enabled buyers to move up the value curve.”
Affordable segment weakens
The data also highlights the pressure on lower-ticket housing segments. Homes priced below ₹50 lakh saw sales fall 17% year-on-year to 73,694 units in 2025.
As a result, the share of affordable homes in overall sales dropped to 21%, compared with 25% in 2024 and nearly 37% in 2022. The ₹50 lakh–₹1 crore segment also weakened, with sales declining 8% year-on-year to 99,422 units.
This shift suggests that while the broader market remains active, demand growth is increasingly concentrated in higher price brackets, leaving entry-level housing under pressure.
Launch activity slows in several key markets
Developers have also shown signs of caution, with new project launches easing across several cities.
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Total launches across the top eight markets stood at 3,62,184 units in 2025, down 3% year-on-year. In the second half of the year, launches declined 4% year-on-year to 1,82,444 units.
City-wise trends were mixed:
- Mumbai saw launches decline 10% YoY to 87,114 units.
- NCR recorded a 16% drop to 50,769 units.
- Pune launches fell 6% to 56,118 units.
- Hyderabad saw a 7% decline to 40,737 units.
Bengaluru, however, stood out with a 23% increase to 68,760 units, while Chennai recorded a 20% rise in launches.
The moderation in launches reflects developers adjusting supply after the strong sales cycle seen over the past two years.
Prices continue to rise despite softer volumes
Even as sales growth slows in some segments, housing prices continued to rise across most markets in 2025, supported by demand in premium categories and higher-end project launches.
Weighted average residential prices increased across leading cities, led by:
- NCR, up 19% year-on-year
- Hyderabad, up 13%
- Bengaluru, up 12%
- Mumbai, up 7%
The report notes that a higher proportion of launches in premium categories has also contributed to overall price growth.
Inventory levels remain stable
Despite launches outpacing sales in certain markets, overall inventory levels suggest the market remains relatively balanced.
Unsold inventory across the top eight cities stood at 5,09,815 units at the end of 2025, with a quarters-to-sell (QTS) ratio of 5.8 quarters, indicating stable absorption.
Within segments, unsold inventory dynamics varied. While inventory in the ₹0–50 lakh segment declined 7% year-on-year, higher-ticket categories such as ₹2–5 crore homes saw inventory rise sharply, reflecting strong supply additions.
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Baijal said the evolving demand mix points to a maturing residential market. “Premium housing has emerged as the principal anchor of India’s residential market. Larger cities continue to demonstrate strong absorption in higher ticket-size segments, while lower priced segments remain under pressure,” he said.
Market enters a consolidation phase
The data suggests that India’s housing market may be moving into a phase of consolidation after rapid expansion in recent years. With premium housing now accounting for half of all transactions, the sector’s momentum is increasingly tied to higher-value demand.
Going into 2026, analysts expect moderate sales growth, stable inventory levels and selective price appreciation, rather than the broad-based surge seen earlier.
