4 days ago
Luxury Housing Sales Surge as Affordable Demand Weakens
More people are buying expensive homes in Indian cities.
Sales of homes costing Rs 1.5 crore to Rs 3 crore jumped sharply in the first half of 2026.
Many buyers have high incomes and can afford home loans more easily because interest rates have fallen.
However, fewer people are buying homes priced below Rs 1 crore.
Building materials became more expensive, so developers raised prices.
Bengaluru is seeing strong demand because it has many well-paid technology and start-up workers.
Kolkata’s housing market has stayed mostly flat because its local economy has been weaker.
Experts expect premium-home sales to continue, but conflicts and local economic conditions could slow demand in some places.
Sales of homes priced between Rs 1.5 crore and Rs 3 crore rose 58% year-on-year to 51,231 units in H1 2026.
Affordable homes below Rs 1 crore accounted for slightly more than a quarter of sales, down from 39% a year earlier.
High-income buyers, economic growth and lower borrowing costs are supporting premium and luxury housing demand.
The repo rate has fallen by 100 basis points, while bank mortgage lending has grown 11% year-on-year each month since December 2025.
Developers expect demand to remain strong, although Middle East conflict risks and weak local economies could affect selected markets.
- Who
- High-income buyers, developers, analysts and housing-market experts are driving and assessing the trend.
- What
- Premium-home sales are rising sharply while demand for homes below Rs 1 crore is weakening.
- Where
- The trend is reported across Indian housing markets, including Mumbai, Hyderabad, Gurugram, Bengaluru and Kolkata.
- When
- The data covers the first half of 2026, with comparisons mainly against the first half of 2025.
- Why
- Economic growth, rising incomes and cheaper home loans are supporting premium demand, while high construction costs are hurting affordable housing.
Premium-Market Optimism
Affordable-Housing Concerns
Demand outlook
Premium-Market Optimism
Developers and analysts say demand remains resilient, particularly in premium and luxury homes, and expect the sales trend to continue with some moderation.
Affordable-Housing Concerns
The prolonged conflict in the Middle East remains a risk to demand, especially if economic uncertainty increases.
Buyer affordability
Premium-Market Optimism
High incomes, economic growth and a 100-basis-point reduction in the repo rate are helping buyers purchase more expensive homes.
Affordable-Housing Concerns
Elevated property prices and higher costs for steel, cement, tiles and fittings are making homes below Rs 1 crore less affordable.
Developer supply
Premium-Market Optimism
Premium homes are economically more viable for developers, supporting continued launches in higher-priced segments.
Affordable-Housing Concerns
Affordable housing may need lower stamp duties and other charges to recover, according to Niranjan Hiranandani.
Key facts
- Premium sales
- Sales of homes priced between Rs 1.5 crore and Rs 3 crore rose 58% year-on-year in H1 2026 to 51,231 units.
- Affordable share
- Homes priced below Rs 1 crore represented slightly more than one-fourth of overall sales in H1 2026, compared with 39% a year earlier.
- Recent price growth
- Residential prices rose 7-10% in Mumbai, 10-12% in Hyderabad and 15-17% in Gurugram over the past two years.
- Mortgage conditions
- The repo rate declined by 100 basis points, and three-fourths of homes are currently bought using credit.
- Bank lending
- Bank mortgage lending increased 11% year-on-year every month since December 2025.
- Segment shift
- The share of sales in the Rs 1.5-4 crore segment increased from 14% in Q1 2022 to 44% in Q1 2026.
- Regional contrast
- Bengaluru has strong demand, while Kolkata sales have largely stagnated and may remain around 15,000 units annually.
Quotes
Niranjan Hiranandani
Managing director of Hiranandani Group
“We expect the strong sales trend to sustain, though with some moderation in select micro-markets”
financialexpress.com
“GDP is growing, income levels are growing and so home sales are also good”
financialexpress.com
Sources
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