India's Housing Market Shifts: Premium Homes Soar as Affordable Segment Shrinks

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AuthorIshaan Verma|Published at:
India's Housing Market Shifts: Premium Homes Soar as Affordable Segment Shrinks
Overview

Sales of premium apartments worth over ₹1 crore grew 6% in India's top seven cities in 2025, sharply contrasting with a 30% decline in units priced below ₹1 crore. This shift sees affordable housing's market share shrink to 37% from 47% a year prior. Despite an 11% drop in overall sales volume, the total sales value climbed 11% to ₹5,57,100 crore, underscoring a strong buyer preference for quality, large-format developments.

Premiumisation Dominates Indian Property Market

India's residential sector is undergoing a significant premiumisation trend, with sales of luxury homes surging while demand for affordable housing dwindles. In 2025, apartments priced above ₹1 crore saw a 6% increase in sales across the top seven cities. This is set against a stark 30% contraction in sales for units below ₹1 crore, a clear indicator of diminishing opportunities for middle-class buyers in major urban centers.

Market Share Skew

The data reveals a dramatic reallocation of market share. Homes priced under ₹1 crore now constitute just 37% of total sales, down from 47% a year ago. Conversely, properties valued at ₹1 crore and above captured 63% of the market, a rise from 53%. This shift, driven by robust demand in the ₹1.5-3.0 crore bracket, has contributed to an overall 11% annual decline in sales volume. Developers are increasingly prioritizing premium housing projects, which offer higher profit margins, a strategic move influenced by escalating land and construction costs.

Developer Strategy and Launches

This market reorientation is also reflected in new project launches. While overall launches decreased by 3%, the premium segment continued to attract developer interest. A notable exception was Kolkata, which saw a 61% surge in launches to 17,164 units, attributed to a statistical base effect. According to Samantak Das, chief economist at JLL India, this trend highlights buyers' evolving preferences for expansive gated communities offering superior amenities, rather than a direct correlation with rising income disparities.

Value Over Volume

Despite the overall dip in unit sales volume, the financial performance of the residential market remains strong. Total sales value experienced an 11% year-on-year increase, reaching ₹5,57,100 crore. This growth underscores a consumer preference for quality and comprehensive lifestyle offerings in premium developments, signaling a maturing market where value propositions outweigh mere price points.

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