Why Indian Home-Sales Value Is Surging Even as Unit Sales Remain Flat

India’s housing market is signaling an unusual split: the value of homes sold is rising sharply, while the number of units sold has barely budged. For many observers, this divergence in Q3 2025 feels like a contradiction. But look closer, and a clear story emerges—one shaped by shifting buyer priorities, premium upgrades, and the realities of affordability.

Snapshot of Q3 2025: Value vs. Volume at a Glance

The India housing market in Q3 2025 paints a telling picture. Developers are recording higher revenue, even though unit sales are largely flat. The implication is unmistakable: buyers who are still in the market are spending more per home than they did a year or two ago.

Whether it’s the lure of larger homes, integrated township amenities, or upgraded lifestyle expectations post-pandemic, the money flowing into real estate today is far more concentrated. Fewer people may be buying—but those who are, are buying big.

What’s Driving Value Up: Premium Homes and Bigger Ticket Sizes

One of the strongest tailwinds lifting the market’s value metrics is the surge in premium and luxury housing. This segment—which includes larger apartments, branded residences, villas, and high-amenity gated communities—has grown significantly faster than mid-income housing.

Three key trends explain the value jump:

1. Buyers Want “More Home”

Work-from-home flexibility and hybrid office models have made space a non-negotiable priority. Many families are upgrading from compact city apartments to spacious configurations or suburban communities with better infrastructure.

2. Rising Construction Costs Are Pushing Prices Up

Input costs—from cement to steel to land—have pushed developers to increase prices. Even without rising volumes, these price hikes alone elevate the total market value.

3. Wealthier Buyers Are Driving the Market

High-net-worth individuals and NRI buyers have returned strongly to real estate as a safe, inflation-beating asset class. Their purchases skew toward premium inventory, lifting value numbers without impacting volumes much.

Why Volumes Aren’t Growing: Affordability, Costs & Supply Bottlenecks

If value is up, why aren’t more homes being sold? The answer lies on the other end of the homebuyer spectrum.

1. Affordability Is Hitting Its Limits

Middle-income buyers—traditionally the engine of India’s real estate market—are feeling squeezed. While salaries have grown slowly, home prices have accelerated much faster. This mismatch has put many potential buyers in a “wait-and-watch” mode.

2. High EMIs Are Discouraging First-Time Buyers

After several rounds of interest-rate adjustments over the past two years, mortgage EMIs remain elevated. For many households, even a small rise in EMI can be the difference between booking a unit and postponing the purchase.

3. Supply Bottlenecks in Popular Price Segments

Affordable and mid-income housing launches have slowed in many top cities. Developers are prioritizing high-margin premium projects—leaving budget buyers with fewer choices and longer waiting periods.

The result: flat volumes despite rising market activity.

Implications for Buyers, Investors and Developers

For Buyers

Those looking for premium homes may continue to face rising prices and strong demand. But mid-segment buyers could find leverage—especially if developers try to push inventory through festive offers and flexible payment plans.

For Investors

The premium segment’s momentum suggests stronger price appreciation ahead. However, rental yields may vary depending on location. Investors should focus on micro-markets where infrastructure upgrades—metro lines, expressways, and commercial hubs—are catalyzing demand.

For Developers

The message is clear: premium sells, mid-income lags. Developers who can balance both—maintaining margins while expanding affordable supply—stand to gain the most in the next phase of the cycle.

What to Watch Next: Will Volumes Pick Up or Value Keep Dominating?

The big question for the India housing market in late 2025 is whether volumes will play catch-up or whether value will continue to dominate.

A few indicators to monitor:

• Interest-rate trajectory: Any moderation could bring first-time buyers back strongly.

• New affordable launches: If developers respond to pent-up demand, unit sales could rise again.

• Economic sentiment: Higher incomes and job security typically translate into higher booking activity.

• Policy announcements: Incentives for affordable housing or tax benefits could shift momentum quickly.

For now, India’s housing market is being fuelled by fewer buyers spending more money—a pattern that may hold until broader affordability improves.