Premium Housing Dominates India's Real Estate Recovery in First Half of 2025

India's residential real estate sector reported contrasting signals during the initial six months of 2025, as industry observers noted significant sales activity in premium housing segments, moderate overall market recovery, and sustained developer confidence evidenced by a robust new launch pipeline.

Market Reports 1.7 Lakh Home Sales Across Top Eight Cities

Data from the first half of 2025 revealed that approximately 1,70,201 residential units were sold across India's eight major metropolitan centers. Market analysts observed that nearly half of these transactions involved properties valued above ₹1 crore, signaling strong momentum in the luxury segment. However, certain markets experienced declining sales volumes, which industry experts attributed to affordability challenges and broader economic uncertainties.

Premium Segment Commands Half of Total Market Share

The luxury housing market now represents 49% of total home sales in India's primary metros, comprising 83,433 units with a notable 17% year-on-year increase. Market watchers suggested this trend reflects rising affluent buyer aspirations, increased investor activity, and constrained premium inventory availability. The segment's performance stood in contrast to broader market challenges, demonstrating resilience among high-value property transactions.

Simultaneously, developers introduced 1,79,740 new residential units during the period, exceeding actual sales figures and indicating sustained optimism about long-term market fundamentals and urban demand patterns.

Regional Performance Shows Mixed Results

Western Markets Face Quarterly Decline

Second quarter data indicated a 14% year-on-year decrease in sales across major cities during April-June 2025. Despite this downturn, the Mumbai Metropolitan Region (MMR), Pune, and Bengaluru continued dominating market activity, collectively accounting for 59% of total quarterly sales.

In MMR and Pune specifically, quarterly sales performance declined by 32% and 27% respectively. Nevertheless, both cities maintained their positions among the top three performing markets alongside Bengaluru, driven by high-value transactions and continued buyer interest.

Gujarat Market Shows Contrasting Trends

Ahmedabad presented mixed market signals, with new project launches experiencing a sharp 61% decline, falling from 31,000 to 11,000 units. Conversely, actual sales increased by 3% year-on-year to approximately 25,000 units, while the total transaction value rose 10% to nearly ₹22,000 crore.

The affordable housing segment (properties under ₹70 lakh) expanded its market share by 2 percentage points to reach 29%, suggesting evolving dynamics in affordable housing segments across different regions.

Eastern Markets Display Robust Launch Activity

Kolkata emerged as a standout performer in terms of new supply, with residential launches surging 105% to approximately 9,000 units. The high-end segment (₹1 crore and above) witnessed a remarkable 325% increase in new launches, though overall sales declined 29% year-on-year. Premium home sales, however, grew 70%, indicating selective buyer interest in luxury properties.

Industry Outlook Points to Gradual Stabilization

Recovery Signals Emerge in Mid-2025

June 2025 marked a significant milestone as residential sales recorded their first positive year-on-year growth of 1% after four consecutive quarters of decline. Industry analysts viewed this development as evidence of market stabilization, supported by steady housing price indices, improved buyer sentiment, and ongoing urban infrastructure developments.

This recovery trend aligns with broader observations about strategic property investment across India's major cities, where buyers are increasingly focusing on locations with strong fundamentals and growth potential.

Price and Rental Market Projections

Real estate consultants projected housing price growth of 6% for 2025 and 5% for 2026, indicating measured appreciation expectations. Urban rental markets received more optimistic forecasts, with projected increases of 5-9% that would outpace inflation rates and provide stable returns for property investors and landlords.

These projections suggest a balanced approach to market recovery, with rental yield opportunities becoming increasingly attractive for investors seeking consistent income streams.

Developer Strategy Reflects Long-Term Confidence

The fact that new launches exceeded sales volumes during H1 2025 demonstrated developer confidence in market fundamentals despite short-term challenges. Many developers reported recalibrating their product mix to align with increasing demand in mid and high-end segments, moving away from pure volume-driven strategies.

This strategic shift reflects broader industry adaptation to changing buyer preferences and market dynamics, as developers focus on portfolio-driven development approaches rather than purely speculative construction.

Market Analysis Points to Dual-Speed Recovery Pattern

The H1 2025 performance highlighted India's housing market operating at two distinct speeds. While some metropolitan areas continued facing affordability pressures and sales volume challenges, the premium segment demonstrated remarkable resilience with sustained transaction activity and strong developer interest.

Early indicators suggested the sector might be transitioning toward more balanced and sustainable growth patterns in subsequent quarters, with price stabilization and modest sales recovery providing foundations for longer-term market health.

Industry experts noted that this dual-speed recovery pattern reflected broader economic trends, where affluent buyer segments remained active while mass-market participants adopted more cautious approaches to property transactions.