Ultra-Luxury Home Sales in India Skyrocket in Early 2025, While Affordable Segment Slips

In the first quarter of 2025, India’s residential real estate sector continued to evolve, with primary housing sales reaching 88,274 units—a slight but telling 2 percent year-on-year increase, as reported by Knight Frank India. While this growth may appear modest, a closer look at the market reveals a compelling shift in buyer behavior, especially at the top end of the spectrum.

Mumbai reaffirmed its position as India’s most active housing market, recording its highest quarterly sales since Q1 of 2018. The city closed the quarter with 24,930 units sold, reflecting a 5 percent year-on-year gain. Pune and Chennai also delivered strong performances, showing 20 percent and 10 percent annual growth, respectively, driven by a surge in demand for larger, amenity-rich homes.

By contrast, four other key metros experienced a slowdown. NCR, Bengaluru, Hyderabad, and Kolkata saw sales decline between 1 to 8 percent, indicating the impact of rising home prices and limited mid-range inventory. Ahmedabad remained relatively stable, showing minimal year-on-year change.

The premium housing segment—homes priced at ₹1 crore and above—emerged as the market’s core growth engine, accounting for 46 percent of all homes sold. That’s up from 40 percent in the same quarter last year, with 40,432 units finding buyers.

The most dramatic activity, however, came from the ultra-luxury space. Homes priced at ₹50 crore and above experienced a striking 483 percent year-on-year jump—leaping from just 29 units sold in Q1 2024 to 169 in Q1 2025. These aren’t just purchases; they reflect a growing confidence among India’s wealthiest buyers, many of whom are seeking long-term legacy homes with architectural merit, privacy, and location exclusivity.

At the opposite end of the spectrum, affordable housing—properties under ₹50 lakh—saw a 9 percent decline in sales, continuing a downward trend driven by rising construction costs, high interest rates, and shrinking urban land availability for budget housing projects.

On the supply side, developers launched 96,309 new units in Q1 2025, a 3 percent rise from the same period last year. Bengaluru led with a 26 percent increase in new launches, pointing to renewed developer confidence and strong local demand. Together, Bengaluru and Mumbai accounted for 44 percent of all newly introduced units.

Inventory levels remain a point of focus. The overall housing stock on the market would take about 5.9 quarters to clear at current absorption rates. However, in the ultra-luxury segment, the pace slows dramatically: homes priced at ₹50 crore and above have a 7.3 quarters-to-sell timeline, while those in the ₹20–50 crore band could take over 18 quarters to fully absorb—highlighting the niche nature of this buyer group.

Knight Frank India chairman and MD Shishir Baijal commented on the evolving landscape: "While pricing pressure has impacted some city markets like NCR and Bengaluru, the upper end continues to remain resilient. The interaction between affluent homebuyers and premium developers will largely determine the tone of the market in the coming months."

Price appreciation continues to make headlines. Bengaluru and NCR recorded significant annual price increases of 16 percent and 12 percent, respectively, as premium high-rise developments reshaped skyline expectations. Mumbai, while already priced at a premium, still posted a 6 percent year-on-year rise.

India's Office Market Surges to All-Time High

In parallel with residential, India’s commercial property market is also seeing unprecedented momentum. Office space leasing across the top eight cities hit 28.2 million square feet in Q1 2025—the highest quarterly transaction volume on record. This marks a 74 percent year-on-year jump and surpasses the previous peak from Q3 2024 by a notable 48 percent.

Bengaluru emerged as the clear frontrunner, accounting for 45 percent of total office leasing activity with 12.7 million square feet transacted. This surge is attributed to a healthy mix of global capability centres, flexible workspace operators, third-party tech service firms, and India-focused enterprises expanding their footprint.

Vacancy rates improved to 14.3 percent across core markets, suggesting tightening supply. Meanwhile, average rents rose between 2 to 9 percent, with premium micro-markets witnessing even sharper spikes due to heightened demand.

As India advances through 2025, both its residential and commercial real estate sectors are undergoing a quiet transformation. While ultra-luxury home sales continue to redefine high-end living, the rise of flexible office environments points to a future shaped by adaptability, experience, and quality-driven choices.