Budget housing struggles to gain traction amid slower sales and limited supply
MUMBAI, Nov 26 (The CONNECT) – India’s housing market continues to tilt unmistakably toward luxury, with Delhi-NCR leading the surge with a striking 72% jump in high-end home prices over the past three years.
Luxury properties across the top seven cities posted the strongest gains of any residential category, rising 40% on average since 2022—a clear sign that demand at the upper end of the market remains resilient despite broader affordability pressures, fresh data from ANAROCK Research shows.
Average luxury prices stood at about INR 14,530 per sq. ft. in 2022 and have climbed to roughly INR 20,300 per sq. ft. this year.
Delhi-NCR recorded the sharpest escalation, with prices rising from about INR 13,450 per sq. ft. to INR 23,100 per sq. ft. over the period. Mumbai Metropolitan Region followed with a 43% rise, while Bengaluru registered a 42% increase.
The data captures a wider shift in the market, where high-end offerings by branded developers continue to attract buyers seeking larger homes in prime locations. “Demand for luxury homes continues to outpace other segments,” said Anuj Puri, chairman of ANAROCK Group.
He noted that nearly 30% of the 2.87 lakh units sold across the top seven cities in the first nine months of 2025 were in the luxury segment, despite higher input costs and a nationwide rise in home prices.
Affordable housing, by contrast, showed far more modest movement. Units priced below INR 40 lakh saw an average price increase of about 26% over the same period, with the segment facing tepid demand and slower sales. Mid-range and premium homes, priced between INR 40 lakh and INR 1.5 crore, posted a 39% rise in average prices, reflecting steady interest from both end-users and selective investors.
City-wise data underscores the contrasts in the market. MMR continues to command the highest prices in the country, with luxury homes currently averaging about INR 40,200 per sq. ft. Bengaluru’s luxury average stands at INR 16,700, while Chennai is at INR 18,500. Hyderabad and Kolkata, despite logging strong percentage gains, remain among the most affordable luxury markets at around INR 14,200 per sq. ft.
ANAROCK’s analysis suggests the luxury segment’s momentum is likely to hold, supported by India’s expanding base of high-net-worth individuals and sustained wealth creation. The muted growth in the affordable category, meanwhile, reflects ongoing stress at the lower end of the market as buyers grapple with stretched budgets and limited supply that matches their price expectations.
Here are some reaction to this trend:
Ankur Jalan, CEO, Golden Growth Fund, a category-II real estate focussed Alternative Investment Fund (AIF) designed for South Delhi sees an opportunity for redevelopment over relocation for South Delhi homeowners.
“This is likely to have a significant impact on the decision-making behavior of homeowners in South Delhi. It may deter many South Delhi residents from opting for the outright sale of their existing homes in favor of moving into newly developed apartments in Gurugram or Noida. Instead of selling, these homeowners may increasingly consider redevelopment of their current properties, a strategy that not only enhances the overall value of their homes through modern amenities, spacious layouts, and premium design features but also has the potential to generate higher rental income in the long term. By choosing redevelopment over relocation, South Delhi homeowners can retain ownership of prime real estate in a highly sought-after area, while simultaneously capitalizing on the booming real estate market, thereby securing both immediate and future financial gains.”
Experts believe the broad-based rise in prices across all seven top cities may prompt some behavioural changes in investment trends.
Dholera-based real estate developer Aaiji Group Managing Director Lalit Parihar said, “Two factors, namely value-driven growth and firming up of rentals in top markets and volume driven growth in tier 2 & 3 cities will drive the real estate sector going ahead as a large part of India’s growing middle and upper middle class will invest in these cities. Also, developers in top markets may be prompted to increase supply of smaller apartment size to cater to the mid-income and premium segment (under Rs 1.5 cr) to drive up volume sales.”
However, a Gurugram-based property brokerage firm believes NCR will continue to see upward surge as demand is real and sustainable.
Vijay Harsh Jha, founder and CEO of property brokerage firm VS Realtors said, “Gurugram has been the major driver for the growth in average price of luxury homes in NCR. The emergence of new micro-markets, infrastructure development, growing presence of corporates, domestic and GCCs, rising demand for luxury homes from HNIs, CXOs, NRIs, founders etc. have driven this growth. The mid-income and premium homes (between Rs 40L-Rs 1.5 cr) too have shown strong price growth indicating all-round end-user demand for homes in the region.”
