The Disappearing Mid-Range Home
The most significant trend in Indian real estate is not what is growing, but what is shrinking. Recent industry data paints a stark picture: the share of new homes launched for under ₹1.5 crore has plummeted. In the first quarter of 2022, this category
represented a dominant 85% of all new housing supply in India's top seven cities. By the first quarter of 2026, that share had fallen dramatically to just 47%. This demonstrates a structural shift away from what was once considered the core of the mid-market. Rather than being a growth engine, the sub-₹1.5 crore segment is becoming a squeezed middle, revealing a market that is rapidly moving up the price ladder.
Where the Real Growth Is
So, if the sub-₹1.5 crore category is contracting, where is the market expanding? The answer lies in the segments directly above it. The share of homes priced between ₹1.5 crore and ₹4 crore has surged, growing from just 14% of new launches in Q1 2022 to a commanding 44% in Q1 2026. Even the ultra-luxury bracket, with homes above ₹4 crore, has expanded its share from 1% to 9% in the same period. Reports from the first half of 2026 confirm this upward momentum, with properties priced over ₹1 crore now accounting for 54% of all home sales, up from 49% the previous year. This premiumisation is the real story of the current housing boom.
The Squeeze on Developers
This shift isn’t just about changing tastes; it's a direct response to economic realities on the ground. Developers are increasingly finding it difficult to build and sell affordable homes profitably. Over the past few years, the cost of key inputs has skyrocketed. Land values in major cities have surged by 50% to 120% since 2021. Over the same period, average construction costs for a standard residential project have risen by 34%. Faced with these escalating expenses, developers are pivoting towards mid-premium and luxury projects, where healthier profit margins and strong demand from affluent buyers offer a more viable business model.
Meet the New Affluent Homebuyer
The demand for these premium properties is being fuelled by a new and expanding class of wealthy Indians. This isn't just traditional business families. The buyers driving sales today are increasingly first-generation entrepreneurs, startup founders flush with cash from the record IPO wave of 2025, and high-earning CXOs and professionals. This demographic is less sensitive to inflation and interest rate hikes and is prioritising larger homes with better amenities—a preference that was greatly accelerated by the pandemic. Furthermore, a renewed interest from NRIs, seeking stable long-term assets in India, is adding another layer of demand to the premium market.
A New Definition of 'Luxury'
Ultimately, the trend surrounding the sub-₹1.5 crore home reveals a re-calibration of the entire market. What this price point represents is changing. In major metropolitan areas, a ₹1 crore price tag is no longer a guarantee of luxury; for many, it's becoming the new normal for a quality family home. This is partly due to soaring property prices pushing what was once mid-market inventory into a higher bracket. The result is a market that is increasingly split. The premium and luxury segments remain resilient, supported by strong demand, while the affordable housing segment faces significant headwinds from both rising costs and constrained buyer purchasing power.
