A recent survey has divulged an important shift in buyer behaviour – India’s housing market shifts towards premium homes as affordable segment declines. The survey – Homebuyer Sentiment Survey H1 2025 – which was conducted by ANAROCK Property Consultants reiterates the resilience of the real estate market while bringing out nuanced shifts in the way consumers consider this investment class.
Notwithstanding global uncertainties, sanctions, and US trade tariffs, the housing sector in India remains supported by strong domestic demand, stable GDP growth and speedy urbanisation. So far, beneath this stability is a rebalancing – while demand for premium housing is consolidating, the demand for affordable housing is dwindling.
The Survey, conducted between January and June this year, gathered responses from nearly 8,250 participants across 14 cities. The online survey sample was selected to fairly represent demographics by geography, gender and age, with responses analysed against prevailing economic conditions to capture the market from a consumer perspective.
Supply Moderation and Sales Trends
The Survey reveals that India’s top seven cities saw about 200,000 new housing units launched in the first half of 2025, compared with 228,000 in the same period last year—a 13% decline. Sales patterns echoed this moderation. ANAROCK chairman Anuj Puri described it as “a phase of recalibration rather than contraction,” emphasising that the sector remains underpinned by long-term fundamentals such as rising disposable incomes and the appeal of homeownership.
Shift Towards Premium Homes
The Survey highlights that India’s housing market has shifted towards premium homes, as over 36% of prospective buyers now prefer units priced between Rs 90 lakh and Rs 1.5 crore. By contrast, demand for affordable housing below Rs 45 lakh has plunged to 17%, compared with 36% in 2020.
This decline is not just a matter of price sensitivity. Many respondents seeking affordable homes expressed unhappiness with current offerings: 92% attributed their dissatisfaction to poor accessibility to location, 90% cited inferior construction quality and design, and 77% of respondents cited small unit sizes.
Buyer Preferences: Bigger Units, New Launches
The demand for bigger homes remains, About 45% of respondents, particularly in Ahmedabad, Hyderabad, Chennai and the Delhi-NCR region, still prefer three-bedroom units.
Another change is the inclination for newly launched projects over ready-to-move-in homes. The ratio of ready homes to new launches now stands at 16:29. This shift reveals greater confidence in large, branded developers who have a record of timely delivery. Improved regulation under the Real Estate (Regulation and Development) Act has also enhanced buyers’ trust, as more than 138,000 projects are now registered and several consumer complaints resolved.
End-users Still Dominate, Investors Edge Back
The Survey shows that 65% of home purchases continue to be for self-use. Investor participation, however, has edged up to 35%, aided by repo rate cuts and improved loan sentiment. Notably, 83% of respondents now feel more confident about buying, and 87% are more likely to take a home loan.
Real estate also remains the most preferred investment option for 63% of respondents, up
from 59% last year. Equities are favoured by 22%, down sharply due to volatility, while gold accounts for just 7% despite global price rises.
Outlook: A Market Redefined by Aspiration
The Survey’s findings propose that the country is entering a new phase shaped by expanding aspirations, strict regulatory frameworks and shifting buyer expectations. Puri noted that “the preference for better, high-quality homes is not affected by increasing prices, and investors are evolving strategies to seize opportunities in this new market”.
As far as policymakers are concerned, the drop in demand for affordable housing underlines the need to examine supply strategies and concentrate on unease over locality and design. Meanwhile, developers are expected to focus on premium and luxury projects, while taking advantage of the regulatory reforms to reinforce buyer confidence. Investors may find renewed opportunities in a sector that continues to do better than other asset classes in both stability and returns.
In an environment where global uncertainties persist, India’s housing market is once again
demonstrating its resilience. The evidence suggests that the next growth cycle will be driven less by affordability and more by aspiration — signalling an important recalibration of the country’s real estate story.
Key Takeaways
The housing market in India in H1 2025 demonstrates a moderation in supply. The Survey shows that the demand is shifting towards premium housing, as 36% of buyers favoured home units priced in the range of Rs 90 lakh–Rs 1.5 crore. On the other hand, the demand for affordable housing dropped to 17%. Nonetheless, end-users continue to dominate at 65%, while investors now comprise 35%. Still, real estate is the top investment class as 63% of respondents prefer it, far ahead of equities and gold. As regulatory reforms have strengthened confidence and the demand for larger homes is high, India’s housing market is driven more by aspiration than affordability.
Data source: ANAROCK’S Homebuyer Sentiment Survey H1 2025
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