India's Housing Market Cools: Premium Projects Surge, Mid-Income Launches Slow
India’s housing market is showing initial signs of cooling as mid-income launches slow down and prices stabilize, providing more negotiating power to ordinary homebuyers.
Housing MarketKnight FrankMidincome LaunchesPremium ProjectsHomebuyersReal Estate NewsNov 17, 2025
The report also stated that 92% of stakeholders had expected prices to stay stable or rise, a figure lower than the 96% recorded a year earlier. The moderation shows that the price surge of 2023 and 2024 has started to ease as buyers resist higher valuations in non-premium categories.
Office stability has supported homebuyer sentiment in key metros. Commercial markets have remained resilient, with about 95% of respondents expecting office rents to stay stable or rise, and 78% expecting new office supply to remain steady or slightly increase. Strong leasing in Bengaluru, Hyderabad, and Pune has helped maintain confidence for urban homebuyers who base purchase decisions on employment visibility and income stability.
Regional readings have aligned with this trend. The South has recorded a sentiment score of 62, while the North has improved to 56. These zones tend to influence mid-market homebuying because construction progress and job movement are directly felt in these areas.
Funding conditions have remained steady, helping buyers plan. The report noted that 86% of respondents expected funding and liquidity conditions to stay stable or improve. Predictable borrowing costs have allowed end users to plan mortgages without sudden rate shocks. Developers have also signalled caution; their future sentiment reading has moved to 59 from 63, while non-developer stakeholders have stayed at 61. As a result, developers will focus on projects with strong presales and avoid speculative expansion.
Bhupindra Singh, COO of RISE Infraventures, said, “We are seeing the market entering a healthier, more balanced cycle after an intense two-year bull run that pushed prices sharply upward. For the first time in several quarters, end-users are regaining negotiation power as launches moderate and developers streamline portfolios toward focused, premium offerings. Besides, there is a shift from emotionally driven buying to rational, need-based decisions; families taking time to evaluate location, connectivity, and the real cost of ownership. With monetary conditions stable and inflation softening, serious homebuyers finally have a sensible opportunity to enter the market without the pressure of steep quarterly jumps.”
Stable rates, easing inflation, moderated mid-income launches, and softer price expectations together create a practical buying environment. This is not a distressed cycle; it is a measured phase where buyers can evaluate options and negotiate with more confidence. Prices will not climb at the earlier pace, and developers will need to work harder to close mid-range sales.
Premium housing will continue to expand because higher-income demand and NRI interest will remain strong. However, this trend will not automatically spill into mid-income pricing because the two segments operate under different drivers.
Kapil Bhagat, General Manager of Better Choice Realtors, said, “After two years of aggressive price appreciation, we’re finally seeing Delhi-NCR’s luxury market mature into a more measured, value-conscious phase. The frenzy has settled, and buyers are far more discerning, comparing neighbourhoods, amenities, and long-term liveability instead of rushing into decisions. In Gurugram, developers, too, are recalibrating launches to ensure quality, timely delivery, and curated luxury rather than volume for the sake of it. It’s being fueled by genuine high-net-worth end-users who value prime quality, connectivity, and long-term capital growth. With interest rates stable and inflation cooling, this is perhaps the most favourable window in recent quarters for end-users to upgrade thoughtfully. It’s a moment where patience, planning, and real value are rewarded.”
The takeaway for end users is that Q3 2025 is the first phase in two years where end users hold real leverage. Developers will continue prioritizing premium launches, but mid-income supply will stay selective. Buyers will have the time to shortlist projects, negotiate terms, and choose builders with stronger delivery records. The report shows a shift from urgency to balance, and that shift gives mid-income households a more stable path to purchase.
Frequently Asked Questions
What is the Knight Frank NAREDCO Sentiment Index?
The Knight Frank NAREDCO Sentiment Index is a quarterly survey that measures the sentiment of real estate stakeholders in India, including developers, brokers, and investors, regarding the current and future state of the housing market.
Why is the housing market cooling in India?
The housing market is cooling due to a shift in builder focus towards premium projects and a slowdown in mid-income launches. This has led to more stable prices and increased negotiating power for ordinary homebuyers.
How has the commercial market performed in key metros?
The commercial market has remained resilient, with about 95% of respondents expecting office rents to stay stable or rise, and 78% expecting new office supply to remain steady or slightly increase. Strong leasing in cities like Bengaluru, Hyderabad, and Pune has supported this trend.
What factors are contributing to a more favorable buying environment for homebuyers?
Stable interest rates, easing inflation, moderated mid-income launches, and softer price expectations are contributing to a more favorable buying environment for homebuyers, giving them more time to evaluate options and negotiate terms.
What is the outlook for premium housing projects in India?
Premium housing projects are expected to continue expanding due to strong demand from high-income individuals and NRIs. However, this trend is unlikely to significantly impact mid-income pricing, as the two segments operate under different market drivers.
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