India’s real estate market is showing a curious imbalance. According to ANAROCK’s 2025 report, total home sales in the top seven cities fell 14% year-on-year, yet the overall value of transactions rose by 6%. The explanation is straightforward: developers launched more high-priced homes, but buyers are hesitant to pay the premiums, leaving a growing chunk of inventory unsold.
Approximately 21% of new launches in 2025 were priced above Rs. 2.5 crore, marking a sharp increase over previous years. While some luxury homes did find buyers, a large share remains on the market. By the end of 2025, unsold inventory reached 5.77 lakh units nationwide, with Bengaluru seeing the sharpest rise at 23%.
Sales Numbers Tell the Story
Last year, India’s seven largest cities saw around 3,95,625 homes sold, down from 4,59,645 in 2024. Yet, the total transaction value crossed Rs. 6 lakh crore, up from Rs. 5.68 lakh crore the previous year. Developers launched roughly 4,19,170 units, slightly higher than 2024, with the supply mix skewed toward mid-segment and affordable homes, but luxury launches grabbed a significant share.
“2025 has been a year of broad-spectrum upheaval,” said Anuj Puri of ANAROCK. “More than 21% of the new supply was launched in the above Rs. 2.5 crore price bracket.” High EMIs, better resale alternatives, and perceived overpricing have deterred buyers, creating a growing stock of unsold luxury homes.
Buyers Hesitate in Higher Price Brackets
For many potential buyers, homes priced above Rs. 2.5 crore are increasingly unaffordable. Rising interest rates have pushed EMIs to uncomfortable levels for salaried professionals. Some buyers prefer resale homes in prime locations, where pricing can be negotiated and immediate occupancy is possible.
Moreover, developers’ pricing strategies often appear disconnected from buyers’ expectations. Luxury home buyers are seeking value and quality of life, not just premium branding. The mismatch between asking prices and perceived worth is a key reason why high-end homes remain unsold despite overall market activity.
City-Wise Contrasts
The sales and inventory trends vary sharply across cities. Mumbai Metropolitan Region (MMR) led with 1,27,875 units sold, though this represented an 18% drop from 2024. Pune saw a 20% decline, while Bengaluru’s unsold stock surged 23%.
In the National Capital Region (NCR), average rates jumped 23% due to a flurry of luxury launches, yet sales volumes dipped 8%. Hyderabad witnessed a 23% fall in sales, but unsold inventory remained stable thanks to fewer new launches. Chennai bucked the trend, posting a 15% rise in home sales.
These contrasts underline the unevenness of the luxury housing market: some cities are overstocked with high-end units, while mid-segment homes continue to see steady demand.
The Road Ahead: Pricing and Interest Rates Matter
Looking forward, 2026 is likely to be shaped by two major factors: interest rates and pricing discipline. Any cut by the RBI could lower EMIs, making luxury homes more accessible. However, unless developers moderate pricing in the premium segment, unsold inventory will likely continue to climb.
Affordable and mid-segment homes remain resilient, highlighting where actual demand lies. Luxury housing is far from dead—but the market is oversupplied. Buyers today are cautious, prioritizing value and location over flashy branding or speculative pricing.
What Developers Can Learn
The current trends highlight the need for smarter launch strategies. Developers must balance supply with actual buyer capacity, particularly in premium segments. Overshooting price points can stall sales and increase carrying costs, while aligning launches with affordability and demand can help reduce unsold stock.
Luxury developers are also paying attention to design, amenities, and location as differentiators, but without matching price expectations, these factors alone cannot guarantee sales. Buyers are increasingly analytical, comparing EMIs, resale alternatives, and neighbourhood quality before committing.
India’s luxury housing market is at a crossroads. Overall sales volumes may be slowing, but rising transaction values reflect a skew toward high-end launches. The resulting unsold inventory indicates a mismatch between supply and buyers’ affordability thresholds.
