Hyderabad's luxury housing market witnessed a sharp decline in the first quarter of 2025, signaling shifting trends in buyer behavior and market dynamics. According to the latest report from Knight Frank India, sales of high-end residential properties dropped by 41% compared to the same period last year.
This decline is notable, considering the city had seen strong growth in the premium housing segment over the past few years. The drop in sales is attributed to a combination of factors including high property prices, rising interest rates, and a shift in buyer focus towards mid-range housing options. Developers are also facing challenges with inventory and pricing strategy in the luxury segment, further impacting sales momentum
Despite the dip in luxury home purchases, Hyderabad’s overall residential market showed resilience with total housing sales across all segments increasing by 10% year-on-year. The city continues to attract homebuyers due to its strong infrastructure, expanding IT sector, and competitive property rates in non-luxury categories. Analysts believe the demand for luxury housing may stabilize in the coming quarters if developers revise pricing strategies and align offerings with evolving buyer preferences.
Areas like Hitec City, Gachibowli, and Banjara Hills remain prime spots for premium housing, but affordability and ROI are becoming critical considerations for potential buyers. The market correction in Q1 may serve as an indicator for developers to reassess their plans and focus on affordability, location value, and flexible financing options to boost future sales. Overall, the data reflects a realignment in the real estate market with luxury housing seeing a pause, while the broader market continues to evolve with changing buyer expectations and economic trends
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