India's Real Estate: Worried Homebuyers, Dropping Affordability But Some Still Betting

India's real estate: A whopping 81 per cent of Indian homebuyers say rising housing prices are a serious concern, while 63 per cent still insist that real estate remains the safest and most rewarding investment. And only 17 per cent of buyers are even considering affordable housing options below Rs 45 lakh, down from 36 per cent in 2020. These three figures sum up the contradiction tearing through the Indian residential market in 2025.

Prices have shot up by over 50 per cent in just two years, climbing from Rs 6,001 per square foot in mid-2023 to Rs 8,990 by mid-2025. In raw terms, that means a flat that might have cost Rs 60 lakh in 2023 now demands Rs 90 lakh or more. For most middle-class households, that difference is not small; it is enough to delay or derail purchase plans. The survey data proves it. Only 21 per cent of respondents will buy as planned, while a heavy 71 per cent will delay (some slightly, some by years), and 6 per cent have abandoned their plans altogether, as per a recent report by Anarock.

Affordability in Retreat

Affordable housing is shrinking into irrelevance. Just one in six buyers now looks at units under Rs 45 lakh, compared to four in ten during 2020. The supply side reflects this collapse. Developers launched 40 per cent of projects in the affordable category back in 2019. Today, it is only 12 per cent. The reason is ugly but straightforward: the target audience cannot buy.

Among those who actually considered affordable projects, 62 per cent reported dissatisfaction. Of them, 92 per cent blamed poor location and accessibility, 90 per cent pointed to bad construction and design, and 77 per cent complained about units that were simply too cramped. These are not solvable irritations; they are structural failures. No wonder many developers are abandoning this bracket in favour of premium and luxury housing, where margins are higher and demand is healthier.

The Tilt Toward Premium and Bigger Homes

If affordable is dying, premium is thriving. Thirty-six per cent of buyers now target homes priced between Rs 90 lakh and Rs 1.5 crore. Before COVID, only 18 per cent were interested in that bracket. Today it is the single most favored range, pushing aside the so-called mid-income bracket of Rs 45–90 lakh, which has slipped to just 25 per cent of demand.

Alongside this budget escalation comes a preference for space. Forty-five per cent of buyers want 3BHKs. Forty per cent want 2BHKs. Seven per cent are going after 4BHKs or larger a figure that may sound small, but it has nearly doubled since 2022. Rising prices have not shaken this demand. The hunger for more space, more rooms, and higher quality lingers on, even when it stretches budgets.

City by city, this demand looks different. In Bengaluru, Delhi-NCR, Chennai, Hyderabad, and Ahmedabad, the majority want 3BHKs. In Kolkata and Pune, the 2BHK still rules. And in Mumbai, the brutal cost of land ensures that 1BHKs still cling to relevance.

Supply and Sales: Pacing the Market

Developers across the top seven cities launched close to 2 lakh homes in H1 2025, down from 2.28 lakh in the same period last year. That is a 13 per cent moderation, not a crash. It is a deliberate strategy to match inventory with demand while keeping focus on quality and delivery. Sales also eased in step with this moderation, a signal that the market is recalibrating rather than contracting.Confidence has been propped up by regulation. RERA has now registered 1.38 lakh projects and resolved the same number of consumer complaints. This kind of transparency has changed buyer behaviour. Ready-to-move homes once dominated, but the ratio has shifted decisively. In 2020, the balance stood at 46:18 in favour of ready homes. By 2025, it is 16:29, with buyers openly favouring new launches. The trust in large, listed developers has tipped the scales.
End-User Versus InvestorSelf-use still dominates. About 65 per cent of buyers are looking for homes to live in, not flip. But investors are creeping back, now making up 35 per cent of participants. This is partly because housing values have jumped by double digits in just a year, making investors take notice. Still, most remain cautious, pausing purchases until prices stabilise or until better entry points appear.Investors who are diversifying have their eyes on property. Forty-four per cent of those spreading their portfolios are now leaning into real estate for stability and long-term growth. Some, about 24 per cent, want to channel gains into entrepreneurial ventures, while smaller numbers save for retirement or even travel. But property still anchors the strategy.
Buyer Demands Beyond PriceNumbers alone do not tell the whole story. Buyers are sharper now, and their demands have hardened. Ninety-eight per cent expect timely project completion. Ninety-three per cent insist on good construction quality. Seventy-two per cent demand well-ventilated homes. These are no longer perks, they are the baseline. Developers who fail to meet them will be dragged into court or left with unsold stock.

The Citywise Breakdown

• Mumbai Metropolitan Region (MMR): 58,900 new homes launched, down 24 per cent. A 2BHK in central suburbs costs Rs 1.6–2.5 crore at about Rs 24,950 per sq.ft.

• Delhi-NCR: 29,900 new units, up 23 per cent. Gurgaon's 2BHKs run Rs 90 lakh–1.3 crore at Rs 11,000 per sq.ft.

• Bengaluru: 36,200 units, up 11 per cent. Central areas command Rs 1.5–2 crore for a 2BHK.

• Hyderabad: 21,400 new homes, down 42 per cent. West Hyderabad priced at Rs 65–90 lakh for 2BHKs.

• Pune: 31,100 units, down 18 per cent. Central Pune 2BHKs range Rs 1.3–1.8 crore.

• Chennai: 13,300 units, up 7 per cent. Central prices reach Rs 1.6–2 crore.

• Kolkata: 7,900 units, up 23 per cent. Central areas average Rs 90 lakh–1.1 crore, while peripheral zones are still Rs 35–55 lakh.

The Indian residential market in 2025 is defined by contradiction. Affordability is collapsing even as demand for bigger and better homes surges. Investors are returning, but they are not in control; end-users still lead. Developers are scaling back affordable projects while doubling down on premium supply. Buyers complain about high prices but continue to treat property as their safest bet.Sixty-three per cent still say real estate is their top investment. Eighty-one per cent fear the price surge. Only 17 per cent can even think of affordable housing. These numbers are not just statistics; they are the battle lines shaping India's housing future.