Decrease in residential launches by 5% in the first half of CY25 due to market caution and increasing costs, according to CREDAI.
Housing Market Shows Shift Towards Premium Homes in Tier 1 Cities
In the first half of 2025, the housing market in Tier 1 cities of India witnessed a significant shift towards premium and luxury homes, as revealed by a report by CREDAI and CRE Matrix.
Despite a 5% decrease in housing sales volume, the total sales value rose by approximately 9%, reaching a record Rs 3.6 lakh crore. This trend indicates a strong preference for larger, more expensive homes priced above Rs 1 crore.
The National Capital Region (NCR) led the revenue contribution with a 21% increase in sales value and a 32% rise in average ticket size. Luxury flats (above Rs 3 crore) accounted for 73% of NCR's sales value, despite relatively modest unit sales. The Mumbai Metropolitan Region (MMR) also experienced 9% growth in sales value with a 16% increase in average ticket size.
Bengaluru showed steady but more modest growth (+4% in sales value), while Hyderabad saw a minor increase in value (+2%) but an 11% fall in units sold. New launches in Hyderabad doubled from 23,000 to 42,000 units, indicating developer optimism.
In Chennai, sales value increased by 23% with 11,000 units sold and a 12% rise in average ticket size. The market share of homes below ₹70 lakh in Chennai dropped from 23% to 17%. New launches in Chennai grew from 14,000 to 19,000 units.
The report also highlighted that the number of units launched in India in the first half of 2025 was around 2.6 lakh, representing a decline of nearly 5% compared to the same period last year.
Overall, the trend in H1 2025 highlights a market pivot away from volume-led growth towards value-driven sales fueled by buyer demand for premium, larger, and luxury homes in Tier 1 cities. The average ticket size of homes sold in India has increased sharply, climbing from ₹1.13 crore in H2 CY23 to ₹1.42 crore in H1 CY25.
References:
[1] CREDAI-CRE Matrix Report, H1 2025 [2] Economic Times, "Housing sales in Tier 1 cities up 9% in H1 2025, but volume down by 5%," 1st July 2025 [3] Moneycontrol, "Mumbai Metropolitan Region sees 9% growth in housing sales value in H1 2025," 5th July 2025 [4] Business Standard, "Trends in Indian housing market: Shift towards premium homes in Tier 1 cities," 8th July 2025
- The shift towards premium homes in Tier 1 cities, as observed in the CREDAI-CRE Matrix Report, H1 2025, could potentially attract more investors to the real-estate sector.
- In the first half of 2025, the housing market's value-driven sales suggest a need for banking institutions to review their investment strategies in the housing finance business.
- The boost in sales value in Tier 1 cities may trigger an increase in subscription for mutual funds focused on the real-estate sector, given the growing interest in the premium housing market.
- The rise in the average ticket size of homes sold in Tier 1 cities indicates a potential for business expansion in the luxury housing market, particularly in regions like the National Capital Region and Mumbai Metropolitan Region.
