The Data Tells the Story
Recent industry data reveals a stark realignment in the Indian property landscape. According to reports from CareEdge Ratings, the share of homes priced below ₹1.5 crore in new launches across the top seven cities has plummeted dramatically. In the first
quarter of 2022, this segment constituted a dominant 85% of new projects. By the first quarter of 2026, its share had collapsed to just 47%. Concurrently, the premium segment has boomed. Homes priced between ₹1.5 crore and ₹4 crore surged from 14% of new launches to 44% in the same period. The ultra-luxury category, with homes above ₹4 crore, expanded its share from a mere 1% to 9%. This isn't just a minor fluctuation; it's a structural shift indicating a deep change in what is being built and bought across the country.
The New Homebuyer's Wishlist
A key driver of this trend is the evolving aspiration of the Indian homebuyer. Post-pandemic life has redefined the concept of a home, turning it into a multi-functional space for work, family, and wellness. Buyers, particularly in the upper-middle and affluent classes, are now prioritising larger homes with better amenities, more open spaces, and enhanced privacy. This demand is not just about square footage but about a lifestyle upgrade. There's a growing preference for homes that offer dedicated workspaces, fitness zones, and a secure community environment. This has created a surge in demand from upgrading families, senior professionals, and a new class of younger, high-income buyers from the startup ecosystem.
The Developer's Playbook Has Changed
Developers are responding to both market demand and economic pressures. The rising costs of construction materials like steel and cement, coupled with increased land acquisition and compliance expenses, have severely squeezed the profitability of affordable and mid-segment projects. Reports from ANAROCK Research show that while construction costs rose by 34% between 2021 and 2025, residential property prices surged by 59%, largely driven by soaring land values. Faced with these realities, developers are finding it more viable to focus on high-margin luxury projects where affluent buyers and non-resident Indians (NRIs) show resilient demand and are less sensitive to price hikes. This strategic pivot allows developers to maintain healthier balance sheets in a high-cost environment.
The Ripple Effect on the Broader Market
This market polarisation has significant consequences. While the luxury segment thrives, the shrinking share of sub-₹1.5 crore housing puts a strain on first-time homebuyers and those in the middle-income bracket. Affordability is becoming a greater challenge, potentially pushing the dream of homeownership further out of reach for a large section of the population. The trend also shows regional variations. Southern markets like Chennai and Bengaluru have shown more resilience in overall sales, driven by end-user demand. In contrast, markets like Delhi-NCR and Pune have seen sales moderate, partly due to affordability pressures after a sustained period of price appreciation. This divergence highlights that the shift is not uniform and is influenced by local economic drivers and buyer sentiment.
