India’s housing market continues to face affordability pressures, as revealed by the latest ANAROCK Consumer Sentiment Survey covering the first half of 2025. Conducted online between January and June with approximately 8,250 participants across 14 major cities, the survey found that 81 per cent of prospective buyers expressed deep concern over escalating residential property prices. The findings highlight the widening gap between housing demand and affordability in urban India, especially for middle- and lower-income segments.
Mumbai Emerges as an Outlier
While affordability remains a key concern nationwide, the Mumbai Metropolitan Region (MMR) presented a contrasting trend. Only 39 per cent of respondents in MMR expressed high levels of concern, while 20 per cent reported being unconcerned about property prices. The remaining 41 per cent were moderately concerned. Analysts attribute this resilience to Mumbai’s distinct market fundamentals, including restricted land availability, consistent inward migration, and ongoing infrastructure enhancements such as Metro expansions, expressway projects, and urban development initiatives.
Industry observers noted that these factors contribute to a sustained level of buyer confidence in the city. ANAROCK Group Chairman Anuj Puri emphasized that Mumbai’s market exhibits strong long-term capital appreciation potential, which underpins continued interest despite rising prices.
Affordability Trends Across Segments
The survey also points to a sharp contraction in the segment of buyers seeking homes priced under ₹45 lakh. Only 17 per cent of participants now prefer this budget, down from 40 per cent in 2020. Correspondingly, affordable housing supply has declined, representing just 12 per cent of new launches in H1 2025, compared to 40 per cent in 2019. Among buyers still considering this segment, dissatisfaction remains high, with concerns over poor location (92 per cent), weak construction quality (90 per cent), and small unit sizes (77 per cent) being the primary deterrents.
This shift indicates a growing tilt toward mid- and premium-priced homes. According to the survey, 36 per cent of buyers prefer homes priced between ₹90 lakh and ₹1.5 crore, while 25 per cent target mid-segment properties in the ₹45–90 lakh range. Larger units continue to be in demand, with 45 per cent of respondents opting for three-bedroom homes.
Changing Preference for Ready Homes
Another notable trend is a declining preference for ready-to-move-in properties. In the first half of 2025, the ratio of demand for ready homes versus new launches stood at 16:29. This contrasts sharply with H1 2020, when ready homes accounted for 46:18 of demand, suggesting that buyers are increasingly willing to wait for under-construction projects, possibly in anticipation of better location or customized options.
End-Users Drive Market Demand
The survey confirms that the real estate market continues to be driven primarily by end-users rather than investors. More than 65 per cent of respondents identified themselves as end-users, with Bengaluru recording the highest investor share at 43 per cent, while Delhi-NCR had the lowest at 26 per cent. This indicates that while investment remains a factor, housing demand is increasingly aligned with consumption and lifestyle requirements rather than speculative gains.
Real Estate Remains a Preferred Investment
Despite affordability concerns, 63 per cent of participants still regard real estate as their preferred investment option, up four percentage points from the previous year. Younger buyers, particularly millennials (70 per cent), are viewing real estate as a tool for both long-term wealth creation and eventual home purchase. Nearly half of Gen-X respondents (46 per cent) also intend to use investment gains to acquire property in the near term, reflecting a sustained confidence in housing as an asset class.
The survey underscores the pressing need for more affordable housing supply, particularly in mid- and lower-budget segments. At the same time, the resilience observed in Mumbai demonstrates how strong fundamentals and long-term capital appreciation potential can maintain buyer confidence even amid rising costs.
Market analysts suggest that upcoming infrastructure projects, policy measures to streamline affordable housing development, and evolving buyer preferences will continue shaping the residential landscape in India. While challenges remain, the data indicates that urban markets with constrained supply and growth potential will likely continue to attract both end-users and investors, reinforcing the critical role of location, quality, and connectivity in shaping demand.
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