Many consumers are looking to upgrade their residences, backed by a buoyant stock market, rising incomes, and affordable loans, experts said.
Developers, too, are seeking to capitalise on this trend, focusing more on upscale offerings in prime urban centres, while the supply of affordable dwellings has reduced.
“As Indian demographics embrace a more global outlook, the appetite for niche, luxe living continues to rise. The 100-basis-point policy rate cut over six months have eased borrowing costs considerably, boosting consumer sentiment and liquidity,” said Niranjan Hiranandani, chairman, Naredco.
He said RBI’s rate cut is expected to spur capital expenditure, support first-time homebuyers on tight budgets, and reignite demand for affordable homes in the near term.
Homes priced above ₹1 crore comprised nearly half of all residential deals across top eight cities in the first half of 2025, showed data from Knight Frank India. Of the 170,000 homes sold during this period, over 83,000 were in the high-value bracket. Sales in the ₹20-50 crore segment surged nearly 30% year-on-year, underlining continued strong appetite for luxury housing.”The residential market is reflecting a nuanced shift where premium and luxury segments continued to thrive. Homes priced above ₹1 crore now constitute nearly half of all sales, an indicator of changing buyer priorities and rising aspirations,” said Shishir Baijal, CMD, Knight Frank India. “Factors including cumulative 100 bps policy rate cut, improved liquidity, and positive economic environment will provide longer legs to this market including lower and mid value categories.”The premiumisation trend is most pronounced in markets like NCR, Bengaluru, and Mumbai that are leading the high-ticket segment by volume.
The affordable housing category, homes priced below ₹50 lakh, saw a decline in both sales and supply in the first half of 2025. Sales in this segment fell by 18% on-year, while new launches fell over 30%, indicating a growing gap in the market’s most price-sensitive category.
The tilt toward premium inventory has also pushed up home prices across the board. Average residential prices rose in all major cities, led by NCR and Bengaluru, where prices rose 14%. Hyderabad saw an 11% rise, while Mumbai, the country’s costliest market, saw an 8% increase, reflecting continued demand for premium homes.
Industry stakeholders including developers and financiers are of the view that the coming months will make this housing demand a more broad-based activity.
