Indian Real Estate Sees Price Hike In H1 2025 as Luxury Homes Lead Demand
In the first half of 2025 in the real estate market of India, there has been a strong increase in the prices of homes. Especially the demand for premium and luxury houses has given air to this boom. According to the latest report by Knight Frank India, the average prices of homes in major cities of the country have increased, with the National Capital Region (NCR) and Bengaluru the highest annual increase of 14% annually. After this, there has been an increase of 11% in Hyderabad and 8% in Mumbai.
Demand for premium houses boom
Demand of premium houses in real estate market has brought prices to new heights. There has been a tremendous jump in sales of houses worth more than Rs 1 crore. Out of a total of 1.7 lakh housing units, 49% i.e. about half of the houses were above Rs 1 crore. Sales in the range of Rs 1-2 crore increased by 17%, while the range of Rs 2-5 crore increased by 29%. People are now turning to homes with big, better location and more facilities.
The developers also launched more houses in the range of Rs 1-5 crore and Rs 5-10 crore, sensing this demand, increasing average prices. Mumbai, NCR and Bengaluru were at the forefront of the premium segment. 81% sales in NCR were recorded in a range of above 1 crore, 70% in Bengaluru and 36% sales in Mumbai were recorded in this category.
Mumbai is the most expensive, Ahmedabad economical
Mumbai still remains the most expensive housing market in the country, where the prices of premium houses are touching the sky. On the other hand, Ahmedabad was the most affordable city among the top-8 cities. The increasing demand for premium houses has also turned the focus of developers towards this segment, which has increased the supply of luxury housing in the market.
Demand for affordable houses decreased
While the demand for premium houses heated the market, the sales of affordable houses priced below Rs 50 lakhs declined by 18%. The new supply in this segment was also reduced by 31%, as the developers now have a trend towards premium projects to pay higher profits. However, the Reserve Bank of India (RBI) has cut the repo rate by 100 basis points in the last six months, which has made the loan cheaper. Due to this, demand in affordable and mid-incoured housing segment may increase in the coming time, especially among those who buy homes for the first time.
4% increase in the number of unusold houses
Although the number of unusual houses increased by 4% and it reached 5.05 lakh units, but the market is still strong. The quarters-to-cell (QTS) ratio is stable at 5.8, which reflects the health of the market. Especially in the range of Rs 2-5 crore, QTS was 3.9 quarters, which shows the strong demand for this segment. In the coming time, the real estate market can become stronger due to cheap debt and increasing demand. Especially the mid-incomplete and affordable housing segment is expected to improve.