The residential real estate market is undergoing a decisive shift, with luxury housing emerging as the dominant growth driver and redefining buyer preferences across the country. Once led by demand for
compact and affordable homes, the market has now firmly entered what industry observers describe as a “luxury era”, where larger homes, premium locations and lifestyle-driven amenities have become central to purchasing decisions.
The year 2025 has proved to be a watershed moment for this transformation. According to the India Market Monitor Q4 2025 report, luxury homes accounted for nearly 27% of total residential sales during the year, bringing the segment within striking distance of one-third of all housing transactions. For the first time, sales of premium and luxury homes outpaced those in the mid-income and affordable categories.
The scale of the shift is striking. In 2022, premium and luxury homes made up just about 12% of total residential sales. In a span of four years, that share has more than doubled, signalling a rapid change in the aspirations and spending power of Indian homebuyers.
Industry experts attribute this surge to a combination of economic and demographic factors. Sustained salary growth in the corporate sector, the expansion of the startup ecosystem, rising entrepreneurial incomes and strong participation from non-resident Indian (NRI) investors have significantly boosted purchasing capacity at the top end of the market.
“Today’s crore-plus homebuyers are looking well beyond basic shelter,” said Yash Miglani, Managing Director of Migson Group, “They want larger homes in prime locations, global-standard amenities and a sense of exclusivity. Features such as clubhouses, swimming pools, landscaped green spaces, smart home technology and sustainable design are no longer add-ons, they are expectations.”
Developers, too, are recalibrating their strategies in response. Many are increasingly prioritising high-end and super luxury projects, particularly in markets where demand has shown resilience even during periods of economic uncertainty.
The definition of luxury, however, continues to vary across cities. In Mumbai and the Delhi-NCR region, homes priced between Rs 1.5 crore-Rs 3 crore are typically classified as premium. In Bengaluru and Hyderabad, the range is narrower, between Rs 1.5 crore-Rs 2.5 crore. At the same time, cities such as Pune, Chennai and Kolkata are witnessing rising demand for homes priced above Rs 1.25 crore, underscoring that luxury housing is no longer confined to a handful of metros.
Harvinder, Chairman of Sikka Group, said strong demand in NCR, Mumbai and Bengaluru reflects the underlying strength of the housing market. “Infrastructure upgrades, improved connectivity and sustained corporate expansion have pushed high-end residential projects to a new level,” he said, adding that the premium and luxury segment is likely to maintain steady growth over the next five to seven years.
The momentum is even more pronounced at the very top of the market. The super luxury segment recorded a sharp rise in 2025, with demand increasing by nearly 70% over the year. Growth during the October–December quarter alone exceeded 60 per cent, pointing to heightened interest from ultra-high-net-worth individuals, who increasingly view real estate as a stable and secure asset class.
“Buyer attitudes have changed fundamentally,” said Amit Modi, Director of County Group, “There is a clear preference for larger, better-planned homes with superior amenities, especially in metro and tier-1 cities. Real estate is no longer seen merely as a necessity, it has become a status symbol and a long-term investment.”
The report noted that around 62,500 homes were sold during the October–December 2025 quarter, while approximately 60,000 new units were launched in the same period. Mumbai, Pune, Delhi-NCR and Hyderabad accounted for the bulk of the transactions, indicating a healthy equilibrium between demand and supply.
For developers, the shift marks a critical inflection point. Success today depends on far more than pricing, said Kushagra Ansal, Director of Ansal Housing, adding, “Design excellence, location, sustainability and reliability of delivery are now decisive factors. The growing appetite for luxury and super luxury homes shows that the market has matured and become quality-driven.”
