India’s housing market is tilting decisively toward higher-value homes, with premium properties now accounting for half of all residential sales across major cities. New data released by Knight Frank India shows total sales of 3.48 lakh units in 2025, signalling resilience in volumes but a sharp shift in buyer preference.
The most notable surge came from Hyderabad, where annual sales rose 12 per cent, with the second half of the year posting even stronger double-digit growth. Industry analysts attribute this performance to sustained IT-sector employment, infrastructure expansion and a steady pipeline of premium gated developments, particularly in the western corridor. In contrast, Delhi NCR recorded a 9 per cent drop in annual sales. Affordable housing demand in the region fell sharply, reflecting tightening household budgets and rising input costs. Market observers say developers in NCR are recalibrating supply pipelines, as sub-Rs 50 lakh inventory contracts amid higher land and compliance expenses. Mumbai remained broadly stable, registering just under 1 lakh units sold during the year, marginally higher than 2024. Despite elevated ticket sizes and some of the highest per-square-foot rates in the country, premium housing absorption remained robust. Redevelopment-driven supply and improved metro connectivity have supported transaction volumes. Other cities presented mixed signals. Bengaluru saw largely flat sales, while Pune reported a modest dip. Ahmedabad and Kolkata posted incremental gains, reflecting stable local demand. Chennai experienced a divergence, with improved second-half momentum offset by weaker full-year numbers.
The defining theme, however, is premiumisation. Homes priced above Rs1 crore now represent 50 per cent of sales across tracked markets. Affordable housing volumes declined 17 per cent year-on-year nationally, underscoring a structural imbalance between supply and end-user affordability. Urban economists suggest several forces are driving this trend. Rising construction costs, land scarcity in core urban zones and evolving buyer aspirations have nudged developers toward higher-margin projects. Simultaneously, upper-income households are upgrading to larger homes in integrated townships offering amenities, energy-efficient systems and enhanced security. Yet the contraction in affordable supply raises long-term concerns. As entry-level options shrink, younger households may face extended renting cycles or relocation to peripheral markets. Inclusive growth, experts argue, will depend on policy support for lower-ticket housing, faster approvals and transit-linked development to reduce cost burdens.
The current cycle reflects both resilience and realignment. While total sales volumes remain steady, the composition of demand is changing. For buyers and policymakers alike, the challenge will be ensuring that premium housing growth does not overshadow the need for broad-based, climate-resilient and accessible urban development across India’s expanding cities.
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