India’s residential real estate market entered a phase of consolidation in 2025, with home sales across major cities stabilising after an unprecedented multi-year surge. While overall transaction volumes remained broadly unchanged year-on-year, the composition of demand shifted decisively towards higher-value homes, signalling a structural recalibration rather than a cyclical slowdown. For cities grappling with land constraints, affordability pressures, and climate resilience, this transition carries long-term urban implications.
Across the country’s largest metropolitan markets, annual home sales hovered around 3.48 lakh units, marking a marginal dip from the previous year. New housing supply softened slightly, yet buyer absorption remained resilient, keeping inventory turnover at healthy levels. Urban planners and market analysts say this balance reflects a maturing market where developers are increasingly aligning launches with realistic end-user demand instead of speculative momentum. Mumbai retained its position as the country’s largest residential market, supported by consistent absorption despite rising prices and limited developable land. Bengaluru, meanwhile, demonstrated relative stability through the year, underpinned by sustained white-collar employment, diversified economic activity, and a steady pipeline of mid-to-premium housing. Chennai recorded notable growth in unit sales, while parts of the National Capital Region experienced moderation following aggressive expansion in earlier years. A defining feature of 2025 was the growing dominance of premium housing. Homes priced above Rs 1 crore accounted for roughly half of all residential transactions, underscoring a decisive move up the value curve.
Industry experts attribute this trend to stronger household balance sheets, improved access to formal finance, and changing lifestyle expectations among urban buyers. In contrast, demand for homes below Rs 50 lakh continued to weaken, constrained by rising land prices, construction costs, and limited availability of financially viable projects in city cores. Weighted average housing prices rose across all major cities, driven largely by the increasing share of higher-ticket launches. Bengaluru and Hyderabad saw double-digit price growth, while Mumbai registered steady appreciation despite affordability challenges. This price resilience, analysts note, reflects end-user-led demand rather than speculative overheating. From an urban development perspective, the shift raises critical questions around inclusivity and housing diversity. While premium housing strengthens municipal revenues and supports formal infrastructure expansion, sustained pressure at the lower end of the market highlights the need for better-aligned affordable housing policies, transit-linked development, and climate-responsive construction that lowers long-term living costs.
Looking ahead to 2026, the residential market is expected to remain stable rather than expansive. With inventory levels under control and buyer intent intact, growth is likely to be city-specific and segment-driven. For India’s rapidly urbanising centres, the challenge will be ensuring that housing supply keeps pace not just with purchasing power, but with the broader goal of equitable, resilient, and people-first urban growth.
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