Affordable Housing Demand Drops Sharply in 2025

According to a report made by ANAEOCK, property consultancy, over 36 percent of intending homebuyers in India favored residential properties within the range of Rs.90 lakh and Rs.1.5 crore during the first half of 2025, indicating a strong skew towards premium and luxury housing.

Against this, 25 percent of potential buyers opted for homes in the Rs.45 lakh to Rs.90 lakh segment, while demand for affordable housing, homes below Rs.45 lakh price tag has dropped sharply.

The report also found that more than 65 percent of home searchers are end-users, whereas investors are adopting a cautious stance with prices going higher. 

Key Highlights:

• Premium housing surges in demand as over 36 percent of homebuyers in H1 2025 preferred properties priced between Rs.90 lakh and Rs.1.5 crore, signaling a shift away from affordable housing
• End-users dominate the market, with 65 percent of prospective buyers looking for homes to live in, while investor interest softens amid rising prices and affordability concerns
• Housing affordability crisis deepens, with 81 percent of buyers citing high prices as a top concern and 90 percent of affordable housing seekers dissatisfied with poor design, size, and construction quality

"Home prices have emerged as a top concern for more than 81 percent of homebuyers in India. This, combined with buyer discontent regarding the quality and space of affordable housing properties, is driving demand towards upper segments." pointed out Anuj Puri, Chairman of ANAROCK Group.

Among India's key cities, Bengaluru recorded the highest proportion of investment buyers at 43 percent, and Delhi-NCR had the lowest investor activity at 26 percent, reflecting strong regional variation in buying intent.

Also read: Top 10 Indian Real Estate Leaders Redefining Affordable Housing

Interestingly, 63 percent of buyers still consider real estate the most preferred investment, a 4 percent jump from last year. However, 92 percent of affordable housing seekers reported dissatisfaction with project locations, and 90 percent criticized construction quality and design, according to the study.

The report also highlighted a precipitous 50 percent hike in mean housing rates in the top seven cities during the past two years from Rs.6,001 per sq. ft. in Q2 2023 to Rs.8,990 per sq. ft. in Q2 2025, aggravating the affordability crisis.