India Housing Sees Premium Surge Amid Affordable Sales Slump

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AuthorKavya Nair|Published at:
India Housing Sees Premium Surge Amid Affordable Sales Slump
Overview

India's housing market reveals a stark divide in 2025. Premium home sales climbed 6%, with units above Rs 1 crore capturing more market share. Conversely, sales of homes below Rs 1 crore plummeted 30%, dragging overall volumes down 11%. This shift validates developers' premium strategies and buyer appetite for higher-value properties.

Premium Segment Dominance

This shift validates developers' premiumization strategies and buyers' appetite for higher-value properties, as detailed by JLL India. Sales of apartments priced below ₹1 crore plunged 30% year-on-year in 2025. This downturn pulled overall residential volumes down 11% across seven major cities. Homes valued above ₹1 crore, however, saw their market share expand.
The share of premium homes rose to 63% of total sales from 53% in the prior year. Conversely, sub-₹1 crore units fell to 37% from 47%. Within the premium category, apartments priced between ₹1.5 crore and ₹3.0 crore witnessed a significant 19% surge in demand. This indicates a clear preference for larger, more upscale residences.

Developer Strategies Shift

Developers responded by strategically prioritizing higher-margin projects. They became more selective with mid-range launches, basing decisions on city-specific and micro-market trends. Chennai, for instance, led transformation with a 45% supply growth. This strategy reflects evolving lifestyle preferences and end-user requirements, shifting buyers from traditional houses to modern apartments.

Price Appreciation Drivers

Robust price growth, ranging from 6% to 13% across key cities, coupled with rising construction costs, underpinned this market premiumization. The total sales value of residential units climbed approximately 11% to reach around ₹5,57,100 crore in 2025. This growth in sales value, despite a decline in unit volumes, confirms the market's transition towards higher-value transactions.

Market Outlook

Experts anticipate steady sales growth for the housing market, even with short-term volume fluctuations. No fundamental structural corrections are foreseen. Home prices are expected to continue their upward trajectory, supported by sustained demand, disciplined inventory levels, and strengthened developer pricing power in the premium segment, though growth rates may moderate.

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