India continues to see signs of changing trends in its housing market, including a recovery in the affordable housing sector even as the luxury property market is oversupplied. According to ANAROCK's latest report, Q1 FY 2025 has revealed a contrasting picture across price sectors.
Affordable Housing: Signs of a Comeback
The affordable housing sector—defined as homes costing less than ₹40 lakh—was hit hard during the pandemic, but we are finally seeing signs of recovery. Unsold stock in this category declined by 19% across the top 7 cities, from 1.40 lakh units in Q1 2024 to 1.13 lakh units in Q1 2025.The reduction makes clear that demand is slowing recovering, especially from the end-user side who were withholding their purchases due to both financial uncertainty and lack of new supply.
City-Wise Affordable Housing Trends
- Bengaluru saw the sharpest drop in unsold affordable homes, with inventory falling by 51%.
- Chennai followed closely with a 44% decline.
- Hyderabad, however, bucked the trend, with a 9% increase in unsold stock, rising to around 1,815 units.
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Luxury Housing: Demand Up, But So Is Inventory
While demand for luxury homes, above the price point of ₹1.5 crore has skyrocketed after the pandemic, the amount of luxury housing available has also surged. Consequently, unsold inventory in the luxury housing segment jumped by 24% y-o-y, from 91,125 units in Q1 2024, to over 1.13 lakh units Q1 2025.While demand is present, the market is seeing careful buyers, possibly due to the wider economic uncertainty and rising property prices that have seemingly slowed transaction rates.
City-Wise Luxury Segment Update
- Chennai and Pune were the only cities to reduce their luxury housing inventory, with unsold stock dropping by 4% and 11%, respectively.
- The remaining five cities reported an increase in unsold luxury homes.
Mid and Premium Segments: Mixed Performance
- Mid-range homes (₹40–80 lakh) saw a 10% decline in unsold stock—from 1.75 lakh units in Q1 2024 to 1.58 lakh in Q1 2025.
- Premium homes (₹80 lakh–₹1.5 crore) saw no significant change, with inventory levels remaining flat.
Overall Inventory Status
The total unsold inventory across all segments in the top 7 cities has dropped by 4%, from 5.81 lakh units in Q1 2024 to approximately 5.60 lakh units in Q1 2025.
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Expert Take
Anuj Puri, Chairman of ANAROCK Group, commented on the evolving situation: "During COVID-19, affordable housing was the most poised to be impacted. Sales and new launches in the top 7 cities of India dropped off a cliff. Affordable housing's share in the overall sales fell from 38% to 18% and from 40% to 16% for supply, between 2019 and 2024."He adds, "The drop of 19% in unsold inventory this year is positive move in the future for sustained demand and real end-user demand. On the other side of the spectrum, since 2019 the luxury segment has increased from 7% of sales up to 26% the share of overall sales and in terms of supply, has also doubled, from 6% to over 12%. However, the luxury segment has some excessive supply, sending a message to investors to find another asset class. As a result, unsold luxury inventory has grown tremendously."
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Ans 1. Affordable housing is showing signs of recovery. Unsold stock in this segment fell by 19% across the top 7 cities, indicating improved demand.
Ans 2. Post-pandemic, low-income buyers were hesitant, and new supply was limited. However, falling inventory suggests that demand from genuine end-users is returning.
Ans 3. Bengaluru recorded the steepest decline, with a 51% drop in unsold affordable homes.
Ans 4. No. While most cities saw a decline, Hyderabad saw a 9% increase in unsold affordable housing stock.
Ans 5. Luxury housing is facing an oversupply issue. Unsold inventory rose by 24%, mainly due to increased new launches and slower buyer absorption.