Top 7 cities see 14% drop in housing sales in 2025, but deal value rises 6% to ₹6 lakh crore

India’s residential real estate market entered a decisive transition in 2025, shifting from volume-led expansion to a more mature, value-driven growth cycle, according to the latest joint report by the Indian Chamber of Commerce (ICC) and ANAROCK.

Housing sales across the top seven Indian cities declined 14% year-on-year to approximately 3.96 lakh units in 2025. However, the total transaction value rose 6% to cross ₹6 lakh crore, highlighting a clear divergence between volumes and value. The report attributes this trend to rising ticket sizes and growing demand for premium and luxury housing.

This shift marks a structural evolution in the housing market. After a prolonged phase of muted price growth between 2015 and 2019, average residential prices rose sharply by nearly 54% during 2019–2024, supported by post-pandemic recovery, infrastructure development, and consolidation among large developers. In 2025, price growth moderated to around 8%, signalling a more sustainable, end-user-driven market.

A notable trend reversal has occurred in the demand mix. Homes priced below ₹75 lakh, which accounted for nearly 60% of total sales in 2021, now represent only about 32% of the market. In contrast, luxury and ultra-luxury segments have expanded significantly.

“One of the most striking changes is in demand composition,” said Anuj Puri, Chairman of ANAROCK Group. “Homes priced below ₹75 lakh have seen their share decline sharply, while luxury housing has gained momentum, supported by rising incomes, lifestyle upgrades, and improved affordability among urban buyers.”

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Homes priced above ₹4 crore now account for approximately 18–20% of total residential sales across the top seven cities, compared to just 1–2% before the pandemic. The ultra-luxury segment, homes priced at ₹40 crore and above, recorded a sharp 66% jump in sales in 2025, with the Mumbai Metropolitan Region accounting for over 70% of such transactions.

Buyer preferences have also evolved toward larger homes. The share of 3BHK and larger units has risen to nearly 45–50%, up from about 30% in 2018. Average unit sizes across major cities have increased by roughly 40% since 2021, led by the National Capital Region, where home sizes have nearly doubled between 2022 and 2025.

On the supply side, the market has become increasingly institutionalised. Listed and Grade-A developers now contribute around 45% of total residential supply, compared to 28% five years ago, reflecting stronger balance sheets, improved execution capabilities, and higher buyer confidence. Over the past five years, nearly 12,700 acres of land have been transacted, with close to 60% earmarked for residential development.

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The report notes that macroeconomic fundamentals continue to support the sector’s long-term outlook. Private consumption accounts for nearly 60% of India’s GDP, government capital expenditure has tripled since FY19, and the banking system remains robust with net NPAs at multi-decade lows. Importantly, India’s mortgage-to-GDP ratio stands at just around 11%, significantly lower than global peers, indicating substantial under-penetration of housing finance.

As India moves toward becoming a USD 7.3 trillion economy, the ICC–ANAROCK report concludes that residential real estate is no longer merely a cyclical sector, but a structural pillar supporting economic growth, capital formation, and long-term urban transformation.