1 week ago
India’s Housing Supply Shifts Sharply Toward Premium Homes
Indian builders are launching more expensive homes than they did a few years ago.
In Q1 2022, 85% of new homes cost less than Rs 1.5 crore.
By Q1 2026, that share had fallen to 47%.
More homes were priced between Rs 1.5 crore and Rs 4 crore, or above Rs 4 crore.
CareEdge Ratings said higher building costs and demand for bigger homes helped cause this change.
Wealthier Indian buyers and NRIs also wanted homes with premium features.
Developers collected more money and reduced their debt compared with collections.
Sales fell in some cities but grew in Chennai, Bengaluru and Hyderabad.
Homes below Rs 1.5 crore fell from 85% of new launches in Q1 2022 to 47% in Q1 2026.
The Rs 1.5–Rs 4 crore segment increased from 14% to 44% of launches, while homes above Rs 4 crore rose to 9%.
CareEdge Ratings attributed the shift to higher costs and demand from affluent buyers and NRIs.
Developers’ debt-to-collections ratio declined from 1.80 times in FY20 to 0.68 times in FY26.
Q1 2026 sales fell in Pune, Delhi-NCR and Mumbai Metropolitan Region but rose in Chennai, Bengaluru and Hyderabad.
- Who
- Indian residential developers, homebuyers, affluent domestic buyers and non-resident Indians, according to CareEdge Ratings.
- What
- New housing supply has shifted from lower-priced homes toward mid-premium, luxury and ultra-luxury properties.
- Where
- India’s major housing markets, including Pune, Delhi-NCR, Mumbai Metropolitan Region, Chennai, Bengaluru and Hyderabad.
- When
- The report was released on Wednesday and compares Q1 2022, Q1 2025 and Q1 2026; financial measures compare FY20 with FY26.
- Why
- Rising land, construction and compliance costs affected the viability of affordable projects, while affluent buyers and NRIs demanded larger homes and premium amenities.
Affordability Concerns
Premium-Market Rationale
Changing housing supply
Affordability Concerns
The decline in homes below Rs 1.5 crore suggests that affordable and lower-priced buyers may have fewer new-launch options.
Premium-Market Rationale
Developers are responding to demand from affluent domestic buyers and NRIs for larger homes with premium amenities.
Reasons for the shift
Affordability Concerns
Rising land, construction and compliance costs have affected the viability of affordable housing projects and increased affordability pressures.
Premium-Market Rationale
Developers say strong collections, fundraising-led deleveraging and financial discipline have strengthened their balance sheets and supported premium projects.
Regional sales performance
Affordability Concerns
Sales declines in Pune, Delhi-NCR and Mumbai Metropolitan Region reflect affordability pressures, price appreciation, market normalisation and cautious sentiment.
Premium-Market Rationale
Southern markets remained comparatively resilient because of steady end-user demand, employment-linked housing needs and continued new-project activity.
Key facts
- Lower-priced homes
- Homes below Rs 1.5 crore represented 85% of new launches in Q1 2022, 57% in Q1 2025 and 47% in Q1 2026.
- Mid-premium homes
- Homes priced between Rs 1.5 crore and Rs 4 crore rose from 14% of launches in Q1 2022 to 34% in Q1 2025 and 44% in Q1 2026.
- Luxury homes
- Homes priced above Rs 4 crore increased from 1% of launches in Q1 2022 to 9% in Q1 2026.
- Developer leverage
- The debt-to-collections ratio fell from 1.80 times in FY20 to 0.68 times in FY26.
- FY26 financial activity
- Collections from sizeable launches exceeded Rs 90,000 crore, while bookings exceeded Rs 1.5 lakh crore.
- Sales declines in Q1 2026
- Sales fell 11% in Pune, 11% in Delhi-NCR and 7% in the Mumbai Metropolitan Region.
- Sales growth in Q1 2026
- Sales rose 9% in Chennai, 5% in Bengaluru and 1% in Hyderabad.
- Reported discrepancy
- One account describes the lower-priced segment as declining to 55%, while the more detailed account reports 57% in Q1 2025 and 47% in Q1 2026.
Quotes
Rajashree Murkute
Senior Director at CareEdge Ratings
“This shift reflects developers' increasing focus on mid-premium and luxury housing, driven by customer preferences and rising land acquisition, construction and compliance costs that have impacted the viability of affordable housing projects.”
freepressjournal.in
thehansindia.com
Sources
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