Almost Half of Homebuyers Express Concern Over Rising Real Estate Prices and Affordability

Skyrocketing housing costs across Indian cities are reshaping the way people think about homeownership. According to ANAROCK’s H1 2025 Consumer Sentiment Survey, almost 80% of homebuyers expressed concern over rising real estate prices, with nearly half of them saying they are “very concerned.” Affordability has emerged as the single biggest hurdle for Indian families aspiring to own a home, particularly as housing prices have surged more than 50% in just two years.

The findings reflect how rapidly changing market dynamics are influencing not just buying decisions but also where and how Indians choose to live.

Survey Highlights: Homebuyer Concerns

ANAROCK’s survey, which polled nearly 8,250 participants, sheds light on how deeply rising housing costs are worrying homebuyers:

• 47% said they are very concerned.
• 24% reported being moderately concerned.
• 12% were slightly concerned.
• 10% described themselves as extremely concerned.
• Only 7% stated they are not concerned at all.

Taken together, these numbers reveal that almost 80% of buyers are impacted by rising real estate prices, highlighting affordability as a dominant theme in today’s housing market.

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Impact on Buying Decisions

The concern is translating directly into action or inaction when it comes to buying homes. The survey indicates:

• Only 21% of buyers plan to proceed with purchases as originally scheduled.
• 71% are delaying decisions:
• 32% for a short period.
• 29% by one to two years.
• 12% indefinitely.
• 6% have cancelled their plans altogether.

The primary reasons behind these delays and cancellations include affordability challenges (41%) and limited availability of suitable options within budget (35%). Rising costs are forcing many families to reconsider the timelines and feasibility of buying property.

Changing Preferences Amid Rising Real Estate Prices

As affordability pressures grow, buyers are shifting their housing strategies:

• 42% continue with their original choices.
• 34% are moving towards renting instead of buying.
• 19% are considering relocating to peripheral locations.
• 5% are opting for smaller homes.

Another subtle trend is the movement away from branded developers to smaller, more affordable projects. While brand reputation remains valuable, the premium it commands is becoming harder for cost-conscious buyers to justify.

City-Wise Trends: MMR as an Outlier

The survey reveals that not all cities show the same levels of anxiety. The Mumbai Metropolitan Region (MMR) stands out as an exception:

• Only 39% of respondents there are “very concerned.”
• 20% reported being not concerned at all.
• 41% said they were moderately concerned.

This is unusual, given MMR is India’s most expensive real estate market. The resilience in demand here may be attributed to higher disposable incomes, established market confidence, and a stronger appetite for premium housing.

Price Trends: Sharp Increase in the Last Two Years

One of the biggest reasons behind buyer anxiety is the dramatic rise in housing costs. ANAROCK data shows:

• Average residential prices rose by over 50% in two years.
• From ₹6,001 per sq. ft. in Q2 2023 → ₹8,990 per sq. ft. in Q2 2025.

The mid-segment and premium categories now dominate the market:

• 36% of buyers prefer homes in the ₹90 lakh–₹1.5 crore range.
• 25% are looking at the ₹45 lakh–₹90 lakh segment.

This shift underscores how rising real estate prices are gradually pushing aspirants towards more premium properties, even as affordability remains a pressing challenge.

Affordable Housing Struggles

Affordable housing, once the backbone of India’s real estate demand, is losing traction rapidly.

• Demand has shrunk to just 17% in H1 2025, down from 40% in 2020.
• Supply has also collapsed, falling to 12% of new launches in H1 2025, compared to 40% in 2019.

Buyer dissatisfaction is widespread in this segment:

• 92% are unhappy with project locations.
• Nearly 90% complain of poor construction quality and design.
• 77% believe unit sizes are too small to be practical.

This dissatisfaction explains why many buyers are upgrading their budgets or deferring purchases until better-quality affordable housing becomes available.

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Expert Insights

Commenting on the findings, Anuj Puri, Chairman of ANAROCK Group, observed:

“City-wise trends indicate that while residential property seekers across cities are extremely concerned about the rising prices in their respective cities, MMR has emerged as a surprising outlier.”

According to Puri, the premium housing segment is gaining strength, while rising real estate prices are eroding confidence in the affordable segment. The survey also indicates a longer-term shift in demand away from low-cost housing towards mid- and premium-segment homes.

Conclusion

The survey findings are a clear signal of how rising real estate prices are reshaping India’s housing market. Nearly half of all prospective homebuyers are “very concerned,” and the majority are delaying or cancelling purchase decisions due to affordability pressures.

From shifting towards rentals and peripheral locations to prioritizing premium properties over affordable ones, buyer behavior is undergoing a significant transformation. With average prices rising more than 50% in just two years, the gap between what buyers want and what the market offers is widening.

Unless affordability is addressed through better financing options, balanced supply, and government interventions this trend could worsen, leaving a large section of aspiring homebuyers priced out of the market.