India’s Residential Real Estate in Q2 2025: Premium homes, market shifts, and the road ahead
The Indian residential real estate market has always been a reflection of the country’s economic pulse, lifestyle aspirations, and demographic evolution. In 2025, the sector finds itself at an interesting crossroads. On one hand, sales have shown resilience with quarter-on-quarter growth; on the other, year-on-year comparisons reveal the first post-pandemic dip in demand. Developers are recalibrating strategies, buyers are displaying shifting preferences, and institutional investors are watching closely as premium housing continues to dominate.

Our Q2 2025 Residential Market Dynamics report offers critical insights into how India’s top seven cities, i.e., Delhi NCR, Mumbai, Bengaluru, Pune, Chennai, Hyderabad, and Kolkata, are reshaping the housing story. While macroeconomic stability and policy support are fueling optimism, affordability challenges, rising prices, and premiumization are dictating how the market is moving forward.

Let us unpack the report’s findings, translating technical data into a reader-friendly narrative. We will explore demand and supply trends, city-wise performance, investment patterns, price appreciation, and what lies ahead for India’s housing market in the second half of 2025 and beyond.

1. Macroeconomic backdrop: A stable foundation
Real estate does not operate in isolation; it rides on the broader economy. Fortunately, India’s macroeconomic fundamentals in 2025 are painting a strong backdrop for the housing sector.
• GDP growth: The Indian economy closed FY 2024-25 with a 6.5% growth rate, underscoring resilience despite global headwinds. More encouragingly, Q4 FY 2025 saw a 7.4% year-on-year expansion, reflecting momentum in consumption and investment.
• Inflation control: A standout achievement has been the taming of retail inflation. Consumer Price Index (CPI) levels moderated significantly, creating stability for households and businesses alike. For the housing market, this means reduced input costs and improved consumer confidence.
• Monetary policy: With inflation under control, the Reserve Bank of India (RBI) shifted gears. It implemented a 100 basis points cumulative repo rate cut in H1 2025, making home loans more affordable and giving both buyers and developers breathing room.
• Trade and services support: Progress on Free Trade Agreements (including a finalized deal with the UK) and a buoyant services sector further support India’s growth trajectory. More jobs in IT, professional services, and manufacturing directly translate into stronger demand for housing, particularly in urban and tech-driven markets.

In short, the economy in 2025 is delivering the stability that real estate needs. Yet, as the report shows, housing demand has not been uniformed across segments or geographies.

1.1 Sales trends: Mixed signals in demand
One of the most striking observations in the Q2 2025 report is the divergence between quarterly momentum and yearly slowdown in residential sales.
• H1 2025 Sales: India recorded 134,776 units sold, a 13% drop year-on-year, the first such decline in half-yearly sales since the pandemic recovery began. This indicates a cooling-off in demand after years of consistent growth.
• Q2 2025 Recovery: Despite this, Q2 alone clocked 69,530 transactions, reflecting a 7% quarter-on-quarter growth. This signals that while the first half overall was muted, momentum is returning as the year progresses.

1.2 City-Wise sales performance
• Bengaluru, Mumbai, and Pune together contributed 63% of all sales in H1 2025, reinforcing their dominance as India’s top residential hubs.
• Chennai was the only city to record positive year-on-year sales growth (+15%), thanks to rising launches and robust absorption.
• Delhi NCR, Hyderabad, and Kolkata saw declines but continued to perform strongly in specific micro-markets.

2. What’s driving the slowdown?
• Elevated property prices: With values rising between 5 to 17% YoY across cities, affordability has become a challenge for many buyers.
• Shift in buyer preferences: Demand is tilting towards premium housing, but mid-income buyers are holding back due to stretched budgets.
• Economic caution: Some fence-sitters are waiting to see if prices stabilize in the coming months.
Despite the slowdown, a critical takeaway is that buyer sentiment hasn’t collapsed. Instead, it is evolving towards quality, branded developments, and lifestyle-oriented homes.

3. Premiumization: The rise of luxury housing
Perhaps the most defining trend of 2025 is the rise of premium housing. What was once a niche has now become mainstream.
• In H1 2025, 62% of sales were homes priced above ₹1 crore (₹10 million), compared to 51% in H1 2024.
• The ₹3 to 5 crore (₹30 to 50 million) segment grew 14% YoY, while the ultra-luxury segment above ₹5 crore (₹50 million+) also expanded by 8%.
• Conversely, the mass housing segment (<₹1 crore) contracted sharply, dropping from 49% share in H1 2024 to 38% in H1 2025.

3.1 City-wise premium demand
• Bengaluru: Strong in the ₹1 to 1.5 crore bracket, driven by IT professionals seeking larger homes near office hubs.
• Mumbai: Led the ₹1.5 to 3 crore market, reflecting the city’s demand for high-value apartments with premium amenities.
• Pune: Dominated the ₹50 to 75 lakh segment, balancing affordability with lifestyle aspirations.
• Delhi NCR: Continued to focus on ₹3 to 5 crore luxury housing, appealing to business leaders and NRIs.

This shift speaks volumes about India’s changing demographics. Rising incomes, global exposure, and a stronger aspiration for lifestyle-oriented living are redefining what “homeownership” means. Buyers are no longer just purchasing a property; they are investing in status, comfort, and long-term value.

3.2 Supply side: Developers betting on premium projects
The supply story complements the demand for premium housing. Developers, too, are pivoting towards luxury and upper mid-segment offerings.
• Total Launches in H1 2025: 154,086 units, a 3% YoY decline marking the first post-pandemic drop in half-yearly launches.
• Q2 2025 Launches: 74,239 units, down 7% QoQ
• Premium Segment Growth: Despite fewer projects overall, launches priced above ₹1 crore grew a staggering 110% YoY.

4. City-Level Highlights

Developers are clearly following the money. Rising construction costs are squeezing margins in the affordable segment, while premium projects offer better profitability. As a result, the share of launches above ₹1 crore rose from 62% in H1 2024 to 70% in H1 2025.

4.1 Price appreciation: Capital values surge

The absorption of quality launches, coupled with supply discipline, is driving prices upward. Developers are leveraging this by launching subsequent project phases at higher price points. While this bodes well for investors and developers, it is also prompting concerns about affordability in the mid-segment.

5. Unsold Inventory & Months to Sell
Despite weaker sales in H1 2025, unsold inventory did not balloon, thanks to reduced launches and strong absorption of premium projects.
• Unsold Inventory: Grew by just 2.7% YoY by the end of Q2 2025.
• Months to Sell (MTS): Declined from 24 months in Q2 2024 to 22 months in Q2 2025.

5.1 City-level MTS
• Bengaluru & Delhi NCR: Saw the highest year-on-year decline in MTS, reflecting strong absorption.
• Chennai: The only city where MTS rose (+5%), due to a 35% YoY jump in launches during H1 2025.

This indicates that developer discipline in launches is preventing an oversupply scenario, keeping the market relatively balanced.

6. Investment dynamics: Capital flows in residential
The capital markets segment reveals an interesting dichotomy while investments declined, residential still emerged as the preferred asset class.
• Institutional Investments: Totaled $1.2 billion in H1 2025, down 27% YoY.
• Residential’s Share: Despite the drop, residential led with a 38% share of all institutional flows, overtaking offices.
• City-Level Investments: Bengaluru leading the pack with33% share; followed by Mumbai Metropolitan Region (MMR) with24% share. Pune and Delhi NCR have smaller but notable shares.

6.1 Key investment trends
• Equity Dominance: Equity deals made up 58% of total investments, signaling investor confidence in long-term growth.
• Foreign Capital: Accounted for 65% of sector inflows, underlining India’s global real estate appeal.
💡Notable Deal: Blackstone’s $214 million acquisition of a 66% stake in Kolte-Patil Developers highlighted sustained foreign interest in branded residential platforms.

7. Outlook for H2 2025 and beyond
Looking forward, the Indian housing market is expected to stabilize, with a mix of challenges and opportunities shaping its trajectory.
• Price moderation ahead: The sharp rise in values may moderate in the medium term, making homes more accessible and sustaining demand.
• Branded developer advantage: Established players will expand into new markets, while smaller, cash-strapped developers will lean on joint ventures for survival.
• Urbanization & infra growth: Ongoing infrastructure projects, metro expansions, and smart city initiatives will continue to fuel demand across segments.
• Policy support: Lower repo rates and inflation control will keep home loans affordable, boosting confidence among buyers.
• Premium & mid-segment balance: While premiumization will persist, mid-segment launches will make a comeback to cater to end-user demand.

In essence, the outlook is balanced yet optimistic; premium housing will remain the star, but affordability will dictate how the mass market revives.

India’s residential real estate market in Q2 2025 is a story of contrasts. On one hand, premium homes are leading sales, launches, and price appreciation. On the other, mass housing demand is shrinking, affordability concerns are rising, and overall sales dipped year-on-year for the first time post-pandemic.
Yet, resilience is evident. Developers are adapting, institutional investors remain engaged, and macroeconomic fundamentals are strong. The coming months will be pivotal. If prices stabilize and policy support continues, the sector could see sustained growth across both premium and mid-segments.
For buyers, 2025 presents both opportunities and challenges: premium projects offer lifestyle and long-term value, while mid-market homes may become more accessible if price moderation kicks in. For developers, it is a test of agility, balancing profitability with inclusivity. And for investors, India continues to be one of the most promising residential markets globally.

Source: The data, figures, & excerpts taken from JLL Research Report titles “25 Insights India Residential Market Dynamics Q2 2025”

Author & Editor: Sumedha Das