Sales of affordable homes—units priced below Rs 5 million —dropped by nine percent year-on-year in the January–March 2025 quarter, according to a report by Knight Frank India. The slowdown comes as price-sensitive buyers face headwinds from rising property prices and elevated interest rates.

The report highlights that demand shifted towards mid and premium segments, with a noticeable decline in the affordable category in metros like NCR, MMR, and Hyderabad. 

Despite a broader upswing in housing demand, the entry-level segment struggled, primarily due to limited new supply and reduced affordability for first-time buyers.

Cities like Ahmedabad and Pune, however, continued to see moderate traction due to better pricing and government-led incentives. Meanwhile, developers are focusing more on higher-margin premium projects, widening the gap in supply-demand dynamics for affordable housing.

Knight Frank’s analysis calls for targeted policy interventions, such as interest subventions, subsidies, and focused credit support, to revive demand in this critical housing segment.

The trend underlines a growing concern around urban housing inclusivity, with affordable housing—once the sector’s backbone—losing pace amid India’s fast-evolving real estate landscape.