India’s residential real estate market witnessed a decisive shift toward premium housing in 2025, even as overall sales volumes moderated, according to JLL. Total apartment sales across major cities declined 11% year-on-year to 270,323 units, but demand for homes priced above ₹1 crore grew 6% annually, underscoring a clear trend of premiumization. Apartments in this segment expanded their market share to 63% in 2025 from 53% a year earlier, driven by buyers prioritising quality, location and long-term value over entry-level pricing. The strength of the premium segment also helped lift total housing sales value by about 11% year-on-year to ₹5.57 lakh crore, despite the decline in unit volumes.

This was especially evident in the INR 1.5-3.0 crore category, which saw demand increase by approximately 19% compared to 2024. The mass housing segment faced significant headwinds, with sub-INR 1 crore home sales declining substantially and their market share dropping to 37% in 2025 from 47% in 2024. This shift underscores the market’s evolution toward premium developments and increasing buyer preferences for higher-quality projects despite rising construction costs.

Chennai emerged as 2025’s standout performer with exceptional 31% Y-o-Y growth, reaching 14,837-unit sales. While all other cities saw a decline in sales, Bengaluru, Mumbai and Pune each surpassed 50,000 units, collectively capturing 63% of annual sales. These three cities demonstrated market resilience during moderation phases, supported by robust employment, established infrastructure, strong purchasing power and quality lifestyle amenities.

The fourth quarter of 2025 saw varied city-level results, with Chennai and Delhi NCR sustaining their housing sales momentum, led by Chennai’s remarkable 86% Y-o-Y growth.

Note: Mumbai includes Mumbai city, Mumbai suburbs, Thane city, and Navi Mumbai; Delhi NCR includes Delhi, Gurugram, Noida, Greater Noida, Ghaziabad, Faridabad and Sohna.

Data includes only apartments. Rowhouses, villas, and plotted developments are excluded from our analysis.

“India’s residential market experienced a premiumization shift in 2025, with properties above INR 1 crore growing 6% Y-o-Y while mass housing below INR 1 crore fell by 30% during the period. Despite an 11% drop in total pan India housing unit sales, total sales value climbed by around 11% Y-o-Y to around INR 5,57,100 crores, demonstrating buyers’ preference for quality developments over price premiums. This healthy sales value performance amid sales unit decline confirms the market’s successful transition toward higher-value transactions, validating developers’ premiumization strategies and buyers’ appetite for premium offerings.” said Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL

Construction cost pressures and market premiumization shape new housing project launches

“Housing supply premiumization was evident in 2025, with premium segments growing 6% Y-o-Y while total launches dropped 3% to 293,079 units. New launches captured 23% of annual sales, showing buyer confidence despite market softening. Developers strategically prioritized higher-margin projects while being selective with mid-range launches based on city and micro-market level trends. Chennai led this transformation with 45% Y-o-Y supply growth, reflecting shift in buyers’ preference from traditional houses to apartments amid evolving lifestyle preferences and end-user requirements,” said Siva Krishnan, Senior Managing Director (Chennai & Coimbatore), Head – Residential Services, India, JLL.

Premium housing segment price growth drives market value expansion despite volume decline

Home prices across India’s seven major cities sustained their upward momentum throughout 2025, with annual price appreciation ranging from 6% to 13% across markets. Chennai, Bengaluru and Delhi NCR led price growth at 13% each, followed by Kolkata at 12%. Developer focus on premium developments, elevated construction costs, and sustained buyer demand for quality projects drove broad-based price appreciation across all key markets despite volume moderation.

Positive sales growth expected despite short-term market adjustments

India’s residential market remains well-positioned for healthy sales despite temporary volume adjustments, with no underlying structural corrections. Home prices will continue rising driven by strong demand, controlled inventory, and enhanced developer pricing power in premium segments, though growth rates may moderate going forward. Recent repo rate cuts have reduced home loan rates and improved credit access, thereby boosted affordability and expanded the buyer pool. The premiumization trend demonstrates buyer commitment to quality developments, while lower borrowing costs will encourage purchase decisions and increase sales values. This value-focused approach, combined with improved affordability, positions the sector for sustained growth beyond current adjustments. Major listed developers are expected to gain market share through strong execution and brand recognition while diversifying across price segments to capture opportunities and manage risk. Overall housing demand shall continue to be supported by government infrastructure initiatives, urban planning reforms, stable employment, and positive migration trends, ensuring long-term growth foundations.