Key Highlights

• Housing sales volumes have moderated across major Indian cities

• Total value of home sales continues to rise despite fewer transactions

• Premium and larger homes are driving higher ticket sizes

• Affordable and mid-income segments face affordability pressure

• Market is recalibrating, not collapsing

India Housing Sales Dip While Value Rises

India’s residential real estate market is sending a mixed but meaningful signal. Housing sales volumes have slowed in several key cities, yet the total value of homes sold is still increasing. While this may seem contradictory at first, it actually points to a structural shift in the market rather than a sign of weakness.

The current trend shows that the market is moving away from volume-driven growth toward higher-value transactions, driven by rising prices, premiumisation, and changing buyer behaviour.

Why Housing Sales Volumes Are Falling

The decline in the number of homes sold is mainly due to affordability challenges. Property prices have risen sharply over the past two to three years, making it harder for first-time buyers to enter the market. This impact is most visible in the affordable and mid-income housing segments.

Higher home loan interest rates, compared to the very low levels seen earlier, have further increased monthly payment pressure. Buyers in price-sensitive segments are delaying purchase decisions, leading to fewer unit sales even though underlying housing demand remains.

Why Transaction Value Keeps Rising

While fewer homes are being sold, the value of transactions continues to rise because average ticket sizes are increasing. Developers are focusing more on larger homes, better layouts, and premium amenities, especially in urban areas where land is limited.

As a result, each sale contributes more value. This explains why overall transaction value is growing even when sales volumes are lower.

Premium Housing Leads the Market

Premiumisation has become a defining feature of the current housing cycle. Buyers with stable incomes, dual-income households, and high-net-worth individuals are still actively purchasing homes. Post-pandemic lifestyle changes have increased demand for larger living spaces, home offices, and better amenities.

Luxury and upper-mid segment housing has therefore remained resilient, while demand at the lower end has softened due to price sensitivity.

Developer Strategy Has Changed

Developers are far more disciplined than in previous cycles. Instead of pushing volumes through heavy discounts, they are prioritising project quality, pricing power, and profit margins. With lower inventory levels in many cities, developers are confident in holding prices firm.

This approach naturally results in fewer but higher-value sales, supporting overall market value despite lower volumes.

Economic Factors Behind the Divergence

Wealth creation from strong equity markets and stable employment in select sectors has supported premium housing demand. At the same time, construction costs such as raw materials and labour have remained high. These higher costs have been passed on to buyers, pushing prices upward.

Together, these factors explain why housing values continue to rise even as sales volumes cool.

Is This a Housing Slowdown

The current trend does not signal a broad housing slowdown. Instead, it highlights a segmented market. The mass housing segment is facing affordability pressure, while premium housing continues to anchor value growth.

This distinction is important. It suggests the market is adjusting to higher price levels rather than experiencing a demand collapse.

What Lies Ahead

Future trends will depend on interest rates, income growth, and policy support for affordable housing. If borrowing costs ease and wages rise, housing volumes could recover and align more closely with value growth.

Until then, the gap between housing sales volumes and transaction value serves as a reminder that headline numbers alone do not tell the full story.

Final Takeaway

India’s housing market today is less about how many homes are sold and more about what kind of homes are being sold. Rising transaction values alongside lower sales volumes reflect a clear shift toward premiumisation, disciplined supply, and selective demand strength. This phase represents a recalibration of the housing cycle, not a market downturn.