Affordable home sales in India down 23%: What's the reason?
What's the story
Sales of affordable homes in India, priced under ₹50 lakh, have witnessed a massive decline of 23% year-on-year in the first quarter of this year. The decline was observed across eight major cities, according to a report by real estate consultant Knight Frank India. The drop in sales is largely attributed to a lack of fresh supply in this price bracket and rising input costs, especially land prices.
Broader impact
₹50L-₹1cr category also saw decline
The decline in affordable housing sales isn't an isolated case. The ₹50 lakh-1 crore category also saw a 12% year-on-year drop in the first quarter of 2026, with 23,567 units sold across the eight cities. These cities include Mumbai, Delhi-NCR, Pune, Bengaluru, Hyderabad, Chennai, Ahmedabad, and Kolkata.
Market resilience
Higher-end segments see increase in sales
Despite the decline in lower price brackets, higher-end segments have seen an increase in sales. The ₹1-2 crore segment saw a 10% rise to 24,657 units during January-March 2026. The ₹2-5 crore category also witnessed a 17% jump with 16,075 units sold. However, sales in the ₹5-10 crore price category fell by 3% to 3,338 units during this period.
Sales trends
Impressive growth in ₹20-50cr segment
In the high-value segment, housing sales in the ₹10-20 crore category increased by 12% to 738 units. The ₹20-50 crore category saw an impressive 80% jump with 165 units sold. However, homes priced over ₹50 crore witnessed a staggering 93% decline in sales during January-March 2026. Overall, across all price categories, Knight Frank data showed that housing sales fell by 4% annually during this period due to high prices and geopolitical uncertainties.
Market dynamics
What did Knight Frank India say?
Shishir Baijal, International Partner, Chairman, and Managing Director of Knight Frank India, said the moderation in residential demand is a result of a sustained multi-year upcycle. He added that this phase can be partly attributed to natural consolidation after strong growth. However, the continued rise in prices and softening volumes indicate growing pressure on affordability and absorption. The volatile geopolitical situation has also subdued interest in residential demand.