India has seen a sharp fall in sale of affordable housing segment of 17% year-on-year in the second of half of 2025.
According to the Knight Frank India report, the share of residential sale in lower segment stood at 5% in H2 2025 against 4% in H2 2024.
The India Real Estate: Office and Residential Market H2 2025 report states that annual sales in the Rs 5 to 10 million category fell by 8% year-on-year. Consequently, homes priced above INR 10 mn now dominate the landscape leaving a comparatively much smaller footprint of affordable housing sales across India.
The sharpest fall in sale of housing units is in Delhi at 9%, and the drop in affordable housing unit sale at 25% YoY. In 2025, the overall sale of houses remained at 3,48,207, seeing a fall of 1% compared to 2024, and the sale of units priced over Rs 10 million rose by 14% YoY.
According to the report, the slowdown in housing sales during 2025 was largely confined to the lower ticket segments.
As per the Knight Frank report, the sale of affordable housing in H2 2024 was 42,863 units, falling to 35,897 units in H2 2025. Whereas, in 2024, the sale was 89,040 units compared to 73,694 units in 2025. In 2025, the affordable housing sector faced a significant supply crunch as well, as developers pivoted away from lower-ticket projects, leading to a 28% YoY drop in new launches for units priced under Rs 5 million and an 9% decline in the Rs 5-10 million category.
This lack of fresh supply resulted in 7% contraction of unsold inventory in the below Rs 5 million segment, even as the broader market underwent a major structural shift toward premiumisation.
Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said, “The overall residential market continues to exhibit underlying resilience, supported by a stable macroeconomic backdrop and recent repo rate cuts. However, the affordable housing segment faces pronounced pressures, with demand declining 17% YoY and supply contracting more sharply by 28% YoY. This divergence signals a structural shift in the market, as capital allocation and buyer preference increasingly gravitate toward higher-value homes. The marked slowdown in new affordable launches highlights developers’ reluctance to commit capital to this segment, as they focus on premium housing, which is shaping the current housing cycle.”