India's Real Estate Market Navigates Challenges and Opportunities in 2025

India's USD 500-billion real estate market saw a second consecutive annual decline in new home sales in 2025 due to high prices. Despite a 14% drop in sales volume, value growth in the luxury segment provided some relief. Developers look forward to budgetary relief and interest rate cuts to revive demand.

In 2025, India's sprawling USD 500 billion real estate market witnessed its second straight annual decline in new home sales, largely due to soaring prices that have strained affordability.

Despite a 14% dip in sales volume, developers find solace in the value growth of luxury segments, as post-pandemic price surges and a shift toward high-end residences boost profit margins. The division in buying patterns becomes more evident, with premium homes appealing to affluent investors, while mid-range and entry-level housing face pressures.

Market optimism persists, anchored by potential tax relief and lower mortgage rates in the upcoming Union Budget, along with India's robust GDP growth. As economic stability strengthens, major players anticipate a resurgence in residential property demand by 2026.