Rising Home Prices in India: 8 in 10 Indians Face Affordability Challenges

Buying a home is becoming increasingly challenging for most Indians. According to ANAROCK’s Consumer Sentiment Survey for H1 2025, rising home prices have become a significant concern for more than 81 percent of property seekers across India. The average residential values have surged over 50 percent in just two years.

In the top seven cities, average prices have climbed from Rs 6,001 per sq. ft. in Q2 2023 to Rs 8,990 per sq. ft. by Q2 2025, up by around 50 percent. This sharp increase highlights the growing affordability gap in the housing market.

The survey reveals a clear gap in the affordable housing market. Sixty-two percent of potential buyers are unhappy with existing options, and 92 percent are dissatisfied with the locations of these projects. Anuj Puri, Chairman of ANAROCK Group, noted that city-wise trends indicate that while residential property seekers across cities are extremely concerned about the rising prices in their respective cities, Mumbai Metropolitan Region (MMR) has emerged as a surprising outlier.

In India's most expensive real estate market, Mumbai, just 39 percent of the surveyed property seekers expressed high concern about the steep prices in the region. The remaining 61 percent have varied opinions—20 percent are not at all concerned, and 41 percent are only moderately concerned. The survey, released on September 8, saw approximately 8,250 participants.

Budget preferences among prospective homebuyers have also shifted. The price range of Rs 90 lakh to Rs 1.5 crore has emerged as the most favored option, preferred by over 36 percent of respondents. This indicates a stronger shift towards premium and luxury properties. Around 25 percent of respondents prefer homes priced between Rs 45 lakh and Rs 90 lakh.

Bigger homes continue to dominate buyer demand, with 45 percent of respondents preferring 3BHKs. The share of affordable housing—homes priced below Rs 45 lakh—has shrunk further to 17 percent in H1 2025 from 40 percent in H1 2020. Puri noted that new supply of affordable housing has nosedived in the last two years across the top seven cities—from 18 percent in H1 2023 to just 12 percent in H1 2025.

Industry experts attribute this resilience in home prices to limited land parcels, rising inward migration, and sustained infrastructure upgrades. The demand for ready-to-move homes is also declining and is at the lowest end of the preference chart. As of H1 2025, the ratio of demand for ready homes against new launches stood at 16:29, compared to 20:25 in H1 2024. This is a complete trend reversal compared to H1 2020, when the demand ratio stood at 46:18, and H1 2021, when it was 32:21.