From Affordable to Aspirational: How India's Housing Market Shifted in 2025

In 2025, India's housing market saw a 14% drop in sales volume but a 6% rise in total transaction value. This was driven by rising prices and a shift towards luxury homes, as demand for affordable and mid-range properties weakened.

India’s $500-billion real estate sector had a mixed year in 2025. While the number of new homes sold fell for the second year in a row, the total value of transactions moved higher, showing that buyers are paying more even as volumes shrink.

According to Anarock, housing sales across seven major cities dropped 14 per cent to about 5.96 lakh units this year, after a 4 per cent decline in 2024. In contrast, the total sales value rose 6 per cent to nearly Rs 6 lakh crore, mainly due to rising property prices and a stronger tilt towards premium housing.

Luxury buyers stay, middle class steps back

The market is clearly splitting into two. High-end homes continue to attract wealthy investors and aspirational buyers, while demand for affordable and mid-income homes remains under stress.

Anarock Chairman Anuj Puri described 2025 as a turbulent year marked by geopolitical tensions, layoffs in the IT sector and persistent policy uncertainty. He also pointed out that the sharp double-digit price increases of the past few years have now cooled to single-digit growth.

Big brands dominate housing sales

Another big trend this year has been the consolidation of demand towards large, well-known developers. Companies such as Godrej Properties, DLF, Prestige Group, Lodha Developers and Signature Global together recorded sales bookings of Rs 92,500 crore during April–September of FY26.

CREDAI National President Shekhar Patel said that while housing demand has stayed resilient, high land prices and limited supply of homes below Rs 1 crore have made it difficult for developers to serve the mass market.

Commercial real estate steals the spotlight

While housing struggled, commercial real estate had a bumper year. Office, retail and warehousing spaces saw record leasing activity, helping India attract institutional investments worth $10.4 billion in 2025 — a 17 per cent rise over last year, as per JLL.

The office segment alone accounted for 58 per cent of total investments, driven by foreign firms setting up global capability centres in India. Industrial and warehousing spaces also touched all-time highs on the back of demand from manufacturing, logistics and e-commerce players.

Fund-raising, clean-ups and big-ticket deals

Strong momentum in commercial assets encouraged many developers to tap the capital markets. Knowledge Realty Trust raised Rs 4,800 crore through a REIT issue, while Raymond Group demerged and listed its real estate arm.

The year also saw the Adani Group acquire debt-ridden Jaiprakash Associates through the insolvency process. Meanwhile, long-delayed Amrapali homebuyers finally began getting possession in Delhi-NCR, though buyers stuck in Unitech, Supertech and Jaypee Infratech projects continue to wait.

What could revive housing in 2026?

Looking ahead, the industry is hopeful of a turnaround in 2026. CREDAI and NAREDCO are urging the government to raise the affordable housing price cap to Rs 90 lakh from Rs 45 lakh so that more buyers can benefit from the 1 per cent GST rate.