A Market Tilting to the Top
Recent data paints a clear picture of a market recalibrating towards luxury. According to a report from CareEdge Ratings, the share of homes priced below ₹1.5 crore in new launches across India's top seven cities has plummeted from 85% in the first quarter
of 2022 to just 47% in the first quarter of 2026. In contrast, the mid-premium segment (₹1.5 crore to ₹4 crore) has surged, now accounting for 44% of new launches, up from a mere 14% in 2022. The ultra-luxury category, with homes priced above ₹4 crore, has also expanded its footprint significantly. This isn't a temporary blip; it's a fundamental change in both what buyers are demanding and what developers are willing to supply.
The New Affluent Indian Buyer
The primary driver of this trend is the growing affluence and evolving aspirations of Indian homebuyers. A robust economy and significant wealth creation have expanded the base of high-net-worth individuals (HNIs) who are less sensitive to inflation and rising interest rates. For this demographic, a home is no longer just a place to live but a statement of lifestyle, comfort, and an investment in well-being. The experience of the pandemic created a lasting desire for larger living spaces, dedicated home offices, and better amenities like private pools and advanced security systems. Buyers are now well-travelled, exposed to global living standards, and are demanding homes that reflect this with superior design, sustainability, and a sense of community.
Developers Follow the Profit
The shift is also being driven from the supply side. Developers are increasingly focusing on premium projects because they offer better financial viability. Rising costs for land, construction materials, and compliance have squeezed margins in the affordable housing segment, making it a challenging market to operate in. In the last five years alone, while construction costs rose by 34%, average residential property prices jumped by 59%, largely driven by soaring land values and the premium segment. Premium projects not only provide healthier profit margins but often see quicker sales, supported by strong demand from affluent domestic buyers and Non-Resident Indians (NRIs) who view high-end property as a stable asset for wealth preservation.
Beyond the Traditional Metros
While Mumbai, Delhi-NCR, and Bengaluru remain the epicentres of luxury real estate, this trend is no longer confined to them. Cities like Hyderabad, Pune, Chennai, and even select Tier-2 cities are witnessing a surge in demand for high-end properties. Improved infrastructure, including better airports and expressways, is boosting the appeal of these emerging hubs. The growth of Global Capability Centres (GCCs) and corporate job hubs in these cities is creating a new class of high-income earners, fuelling local demand for premium residences. This geographic broadening indicates a deep-seated and widespread change in India's consumption patterns.
