Homebuyers shift focus to premium homes as sub-₹1 crore sales dip 32% in Q1 2025

The residential real estate market is showing signs of a shift in buyer preferences with a lowering of demand for less than ₹1 crore housing and a growing affinity for mid to high-end properties. Despite a steady decline in quarterly sub-₹1 crore housing sales in Q1 2025, which generally constitute a substantial proportion of the overall demand, residential sales experienced a modest decline of 12% year-on-year and added up to 65,246 units in the said quarter, thanks to robust demand in the ₹1.5-5 crore segments, the latest data by commercial real estate and investment management company JLL India shows.

In addition to a 12% year-on-year drop in demand, total sales of 65,246 units during Q1 2025 dropped 11% Q-o-Q as well. In terms of ticket size wise segregation of quarterly sales, only ₹1.5-3 crore homes saw around 14% Q-o-Q growth, accounting for 24% share in quarterly sales volume. On YoY terms too, the units priced above ₹1.5 up to ₹5 crore recorded growth, while the rest saw negative growth. Those priced ₹1.5 crore–3 crore saw 22% growth in sale of units and those priced ₹3 crore–5 crore clocked 20% growth in Q1 2025.

The stability in higher ticket size homes helped "counterbalance" the slowdown in relatively affordable housing, indicating increasing affluence among homebuyers, changing lifestyle preferences and buyers prioritising larger and premium properties.

Bengaluru, Mumbai, and Pune, which collectively accounted for 66% of Q1 2025 sales, dominated the housing sales among India's top seven cities. The high concentration of MNCs and startups, creating employment opportunities and ongoing infrastructure improvements, make these cities top choices for real estate investments.

Projects launched by reputed developers are driving the trend

Over the last few quarters, a significant share of quarterly sales volume has been contributed by projects launched during the same quarter. Q1 2025 also saw a similar trend, with around one-fourth of its sales being contributed by quarterly new launches, the data shows.

Projects that are being launched by reputed developers, with assurance of timely delivery and steady price appreciation, are driving the trend. “This (trend) suggests a potential upward movement in the overall market dynamics. While sales of apartments priced under ₹1 crore have dropped by around 32% compared to Q1 2024, the housing segment priced at ₹1 crore and above has seen a growth of about 10% during the same period. This upswing in the higher-priced segment demand has shielded the overall housing sales from a sharper decline,” said Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.

A total of 79,847 housing units were launched in Q1 2025 across top seven cities of India, representing an 8% increase quarter-on-quarter but about 1% YoY. "Bengaluru reached a significant milestone in Q1 2025, recording its highest-ever quarterly launch volume with a remarkable year-on-year growth of approximately 62%,” said Siva Krishnan, Senior Managing Director (Chennai & Coimbatore), Head - Residential Services, India, JLL.

Looking ahead, the year 2025 is seen clocking robust growth in the residential sector demand, driven by factors such as increasing urbanisation, ongoing infrastructure improvements, growing demand for premium homes, higher disposable incomes and a declining trend in home loan interest rates.

The stakeholders say the supply dynamics are as well expected to maintain its momentum, characterised by heightened buyer activity, influx of quality developments from reputable builders in prime locations, increased institutional investments and rising popularity of tech-enabled, modern residences. Mohit Agarwal, Business Head at Gurugram-based Conscient Infrastructure says the demand for luxury housing is on the rise, as buyers seek modern amenities, expansive green spaces, and a refined living experience, which highlights the evolving real estate landscape.