India's Housing Shift: Bigger, Pricier Homes Dominate Demand

According to the ANAROCK Homebuyer Sentiment Survey for H1 2025, India's housing market is experiencing a decisive shift. Homebuyers are now increasingly preferring premium and larger homes, despite the rising prices.

The survey, conducted across 14 cities with over 8,200 respondents, highlights a significant change in investment preferences. Real estate has emerged as the top asset class, with 63% of respondents considering it the best option, up 4% from the previous year. This surge in investor appetite is driven by long-term stability, diversification, and expectations of price appreciation.

Interestingly, the demand for affordable homes (below ₹45 lakh) has shrunk to just 17% in H1 2025, down from 36% in H1 2020. This decline is attributed to dissatisfaction with factors like location, construction quality, and unit sizes, as highlighted by over 60% of affordable home seekers.

In contrast, the preference for larger homes has grown steadily. Around 45% of respondents now favor 3BHK units, while 40% prefer 2BHKs. The demand for 4BHKs and above has also increased, rising from about 4% in 2022 to 7% in 2025. This trend is particularly strong in cities like Bengaluru, Delhi-NCR, Hyderabad, Chennai, and Ahmedabad.

The shift in buyer preferences is also reflected in the demand for new launches, which have gained ground amid stronger regulations and consumer confidence. The ready-to-new launch ratio has shifted from 46:18 in H1 2020 to 16:29 in H1 2025, indicating a growing trust in large, branded developers and the regulatory support under RERA.

However, the rising housing prices, which have increased by more than 50% in the last two years, are a growing concern. As a result, 81% of buyers have expressed concern, with 71% planning to delay purchases and 6% considering cancellation altogether.