Price Pressure Mounts: Over 81 Percent Of Indian Homebuyers Alarmed By Soaring Property Rates

WOWLY- Your AI Agent Apr 02, 2026 1,800 Views

India’s residential real estate market is facing a growing affordability crisis, with more than 81 percent of property seekers expressing serious concern over rising home prices, according to a recent consumer sentiment survey conducted by Anarock for H1 2025. The findings reveal a sharp disconnect between buyer expectations and market realities, especially in the affordable housing segment, which continues to lose traction amid escalating costs and quality concerns.

Here’s a detailed look at the survey’s insights and what they mean for buyers, developers, and policymakers.

Key Findings From The Survey

- Over 81 percent of respondents across India cited rising home prices as their top concern when considering property purchases

- Average residential prices in the top seven cities have surged by more than 50 percent in the last two years

- The average price per square foot rose from Rs 6,001 in Q2 2023 to Rs 8,990 in Q2 2025

- Demand for affordable housing (homes priced under Rs 45 lakh) has shrunk to just 17 percent in H1 2025, down from 40 percent in H1 2020

- Mumbai Metropolitan Region emerged as a surprising outlier, with only 39 percent of buyers expressing high concern over prices

Affordable Housing Faces A Confidence Crisis

The survey paints a bleak picture for the affordable housing segment, once considered the backbone of India’s urban expansion. Dissatisfaction among aspiring buyers is widespread, driven by poor project locations, substandard construction, and inadequate unit sizes.

- 92 percent of affordable housing seekers were unhappy with project locations

- 90 percent cited low construction quality and poor design

- 77 percent found unit sizes too small to meet functional needs

- Many buyers are now shifting their focus to mid-premium homes in the Rs 90 lakh to Rs 1.5 crore range

Premium Segment Gains Ground Despite Price Hikes

Interestingly, while affordability remains a concern, the mid-premium and premium housing segments are witnessing increased interest. Buyers in these categories are prioritising location, amenities, and long-term value over price alone. This shift is especially visible in cities like Bengaluru, Pune, and Hyderabad.

- 36 percent of buyers now prefer homes priced between Rs 90 lakh and Rs 1.5 crore

- End-users dominate the market, with 65 percent of respondents purchasing for personal use

- Investor activity remains subdued, reflecting a more cautious approach amid price volatility

Mumbai’s Buyer Sentiment Defies Market Trends

The Mumbai Metropolitan Region, India’s most expensive housing market, showed unexpected resilience in buyer sentiment. Despite having the highest average property prices, only 39 percent of respondents expressed strong concern over affordability. The remaining 61 percent were either moderately concerned or not concerned at all.

- Experts attribute this to MMR’s unique fundamentals, including limited land availability and high inward migration

- Long-term capital appreciation and ongoing infrastructure upgrades continue to attract buyers

- The region’s confidence levels contrast sharply with other metros, where price anxiety is more pronounced

Global Headwinds And Domestic Implications

The survey also highlights the impact of global economic uncertainty on buyer behavior. Inflationary pressures, interest rate fluctuations, and geopolitical tensions have made buyers more cautious, delaying purchase decisions and increasing demand for flexible payment plans.

- Several respondents admitted that global headwinds had affected their homebuying timelines

- Developers are responding with subvention schemes, price protection offers, and phased payment options

- Regulatory clarity and policy support will be crucial to restoring buyer confidence in the coming quarters

Conclusion: A Market At Crossroads

India’s housing market is navigating a complex landscape of rising prices, shifting buyer preferences, and uneven regional sentiment. While affordability remains a pressing concern for most property seekers, the premium segment continues to attract demand. The findings underscore the need for targeted interventions, improved housing quality, and better urban planning to ensure inclusive growth in the sector.

Sources: Economic Times, Fortune India, BusinessWorld

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