Decoding the Indian Real Estate Buyer in {YEAR}

What do Indian homebuyers want in {YEAR}?

Indian homebuyers split into three segments with very different priorities. Luxury buyers (above ₹1 crore) want exclusivity, bespoke design, larger layouts and wealth protection. Mid-segment buyers (₹60 lakh to ₹1 crore) are price-sensitive and focus on location, developer reputation and financing terms. Affordable buyers (below ₹50 lakh) depend heavily on government schemes and loan access.

Across all three groups, five factors decide the purchase: price, location and connectivity, developer trust, family and lifestyle needs, and long-term resale value.

The market itself has shifted upward. In H1 2026, homes priced above ₹1 crore made up 54% of all residential sales across India's major cities, up from 49% in H1 2025 (Knight Frank India, H1 2026). Meanwhile homes below ₹75 lakh have fallen to 32% of sales, down from nearly 60% in 2021 (ICC and ANAROCK, January 2026).

This is the single most important fact for anyone selling homes in India today. The volume is moving up the price ladder.

India's housing market at a glance

Who is this report for?

• Real estate developers and builders who need to understand shifting buyer priorities and align projects with real demand.
• Investors and financial institutions looking for where the returns actually are.
• Homebuyers who want to make an informed decision instead of a rushed one.

Why this report matters

Property prices are rising. The economy is shifting. New technology is changing how people search for and buy homes. Good decisions have never mattered more.

This report gives you the numbers behind those decisions. It shows where the market is heading, where the money is going, and what buyers will want next.

Backing a luxury project, solving for affordability, chasing mid-segment growth: the data here tells you where to place your bet.

Introduction: three forces reshaping Indian real estate

Indian real estate is more than a marketplace. It is a mirror. It reflects how the economy moves, how culture shifts, and how policy changes.

Cities are growing fast. Wealth is reaching new groups. Rules are getting tighter. For developers and marketers, reading the buyer has never mattered more.

Three forces drive property purchases in India today. New wealth. Fast-growing cities. Changing lifestyles. This report breaks down all three.

The report covers three segments: luxury and ultra-luxury, mid-segment, and affordable housing. For each one it looks at buyer behaviour, key trends, the factors influencing decisions, and what comes next.

What is driving luxury real estate demand in India in {YEAR}?

Luxury housing demand in India is driven by four forces: a growing number of high-net-worth individuals, sustained NRI investment, scarce land in prime metro locations, and rising demand for bespoke design and smart-home technology.

The numbers show a structural shift, not a passing trend. Homes priced above ₹4 crore now account for 18 to 20% of total sales, compared with just 1 to 2% before the pandemic (ICC and ANAROCK, January 2026). Ultra-luxury homes priced above ₹40 crore saw sales jump 66% in 2025, with the Mumbai Metropolitan Region accounting for over 70% of those transactions.

In FY26, 811 homes priced at ₹10 crore and above were sold across three major cities, worth roughly ₹11,246 crore (India Sotheby's International Realty and CRE Matrix). Hyderabad led with 625 sales worth over ₹8,500 crore, driven by competitive pricing and larger property sizes. Bengaluru followed at ₹1,957 crore, Chennai at ₹727 crore.

For developers, this means fewer, larger and more customised units in scarce locations will outperform volume-led plays.

Trends defining luxury real estate today

• Bigger budgets, fewer units. Housing sales across the top seven cities fell 14% in 2025 to about 3.96 lakh units. Yet total sales value rose 6%, crossing ₹6 lakh crore. Buyers are trading up, not buying more often.
• Bespoke is the buzzword. One-size-fits-all is finished. Wealthy buyers want homes that reflect their own taste. Custom villas, holiday retreats and premium apartments with intelligent design are winning.
• Space is the new status symbol. Preference for 3BHK and larger units has risen to 45 to 50% of buyers, up from around 30% in 2018.
• New cities are joining the party. Mumbai still dominates ultra-luxury. But Hyderabad, Bengaluru and Chennai are now serious luxury markets in their own right.
• The market is consolidating. Listed and Grade-A developers now account for around 45% of total residential supply, up from 28% five years ago. Buyers are choosing balance sheets they can trust.

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What is pushing luxury buyers to buy?

• India's wealth boom. India is home to roughly 13,600 ultra-high-net-worth individuals, who allocate around 32% of their portfolios to real estate (Mordor Intelligence, January 2026). For them, a luxury home is a store of value as much as a place to live.
• Global exposure, local aspirations. Buyers who travel want homes that match what they have seen in New York, London and Dubai. Bespoke design, smart technology and world-class amenities are now table stakes.
• Smart money moves. Tax benefits on property depreciation and home loan deductions make luxury real estate a considered financial play, not just an indulgence.
• Scarcity breeds exclusivity. Prime land in high-demand metros is running out. Prices rise, and the homes become harder to replicate.
• NRI demand. Overseas Indians continue to buy in India, driven by emotional ties, better value than global markets, and the prestige of a prime address back home. Developers can reach this audience through geo-targeted campaigns for NRI buyers, one of ten strategies that drive real estate project sales.

Luxury homes in India are more than four walls. They are power moves. As wealth grows, so does the appetite for properties that blend exclusivity, investment potential and long-term value.

Where is luxury real estate heading?

• Growth continues. India's luxury residential market was valued at USD 57.87 billion in 2025 and is estimated at USD 64.21 billion in 2026, growing at a CAGR of around 11% (Mordor Intelligence, January 2026).
• Wealth is spreading beyond the metros. Tier-2 corridors are producing new luxury buyers, broadening the market beyond Mumbai and Delhi NCR.
• Integrated townships. Gated, self-sustaining communities with world-class infrastructure are becoming the default luxury format.
• Smart, AI-powered homes. Buyers expect AI-driven security, automated lighting and connected systems as standard.
• Sustainability is no longer optional. A growing share of younger millionaires specifically target green-certified developments.
• Wellness is the new luxury. Private spa areas, yoga zones and serious fitness facilities are now core to the offer, not extras.

What should luxury developers prioritise?

Exclusivity and personalisation. Buyers are not looking for luxury. They are looking for their version of it. Offer bespoke designs, customisable layouts and ultra-premium finishes. Think beyond the standard penthouse.

Prime, scarce locations. In luxury, the address matters as much as the architecture. Prioritise landmark sites. Keep projects limited in size to protect exclusivity.

Amenity-driven communities. High-net-worth buyers want security, leisure, business and wellness within reach. Invest in clubhouses, private lounges and branded residences.

Smart and sustainable systems. Equip homes with AI-enabled security, biometric access and voice control. Integrate solar, rainwater harvesting and green-certified materials.

Investment positioning. Highlight capital appreciation, rental yields and tax benefits directly in your marketing. Offer structured payment plans and financial consulting for HNIs and NRIs.

NRI-focused service. Simplify the purchase with dedicated NRI desks, legal assistance and remote buying options. Offer dual-purpose properties that work as holiday homes with rental potential.

Brand experience. In luxury, perception closes the sale. Collaborate with recognised architects and designers. Build immersive walkthroughs and high-end launch events. We cover the creative side of this in more detail in our guide to luxury apartment advertising ideas that attract high-net-worth buyers. This is where specialised real estate marketing services turn a good project into a market leader.

Why is mid-segment housing in India slowing down?

Mid-segment housing, covering homes priced between ₹60 lakh and ₹1 crore, is under pressure because property prices have risen faster than incomes. Average residential prices surged 54% between 2019 and 2024. Growth moderated to around 8% in 2025, but the gap between price and salary had already opened.

The result is visible in the data. Homes priced below ₹75 lakh have fallen to 32% of sales, down from nearly 60% in 2021 (ICC and ANAROCK, January 2026). Many buyers have not left the market. They have moved out of the city, moved up their timeline, or moved to renting.

Key trends shaping the mid-segment

• Buyers are deferring, not disappearing. Homeownership remains the goal. The purchase is being postponed until the numbers work.
• Renting is filling the gap. As prices rise, more people choose to rent rather than stretch their finances. Rental demand in metros has climbed as a result.
• Bigger is better. For those still buying, size matters. Buyers are moving away from compact apartments toward layouts that offer flexibility and long-term value.
• The suburbs are winning. Affordability has pushed demand outward, into suburban belts and tier-2 and tier-3 cities.

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What are mid-segment homebuyers looking for?

Affordability comes first. Rising prices and slower income growth make this the deciding factor. Buyers are price-sensitive and willing to wait.

Location and connectivity. Proximity to workplaces, transport and social infrastructure matters more than square footage. As we argue in where you buy matters more than what you buy, the location decision often outweighs the property itself.

Quality and amenities. Buyers expect modern layouts, good ventilation and natural light. Security systems, smart home features and green spaces have moved from extras to expectations.

Developer reputation. With concerns over delays and construction quality, buyers are choosing reputed names. A track record of on-time delivery and legal compliance is now a competitive advantage.

Financing terms. Home loan access and interest rates directly shape the decision. Flexible payment plans widen the buyer pool.

Emotional and aspirational drivers. Home buying is tied to status, security and long-term investment. Buyers weigh resale potential before signing.

Sustainability. Solar energy, rainwater harvesting and energy-efficient design are becoming genuine selling points, not just marketing lines.

Where is the mid-segment heading?

• Price stabilisation. After the 2019 to 2024 surge, price growth has moderated to around 8%. This points to a healthier, end-user-driven market rather than a speculative one.
• Policy support. PMAY-U 2.0 now extends benefits to middle-income groups, which brings part of the mid-segment into subsidy range for the first time at this scale.
• Suburban expansion. With metro affordability stretched, suburban belts and tier-2 and tier-3 cities offer more space for the money.
• Demand holds. Homeownership aspiration in India has not weakened. The timing has shifted, not the intent.

What should mid-segment developers prioritise?

Smart pricing and flexible financing. Offer competitive pricing, home loan partnerships and workable EMI options. Explore PMAY-U 2.0 eligibility for your buyers, since the MIG categories now qualify for interest subsidy.

Location and connectivity. Focus on suburban and tier-2 and tier-3 markets. Develop near transit hubs, IT corridors and employment zones. Build where the infrastructure is going, not just where it is.

Space optimisation and functional design. Prioritise efficient layouts. Offer work-from-home corners, modular kitchens and convertible rooms. Get ventilation, natural light and storage right.

Quality construction and value-driven amenities. Deliver durable homes that balance cost with quality. Include security, clubhouse facilities and green spaces. Build for community, not just occupancy.

Technology and sustainability. Invest in energy-efficient features and water conservation. Add app-based security and digital access controls. Use construction technology to hold costs down.

Branding and trust. Build a reputation for on-time delivery and transparency. Show past projects and quality assurances openly. Use virtual site visits to widen your reach.

Is affordable housing in India still affordable in {YEAR}?

Affordable housing in India is shrinking as a share of the market, and the reason is supply, not demand. Homes priced below ₹40 lakh accounted for just 10% of new supply in Q1 2026 (ANAROCK). Land cost inflation, construction cost escalation and thin developer margins have pushed builders toward premium products.

Demand has not gone anywhere. Homeownership remains a core aspiration for lower-income households. But the formal market is producing fewer homes they can buy.

For context on what qualifies: under GST rules, properties priced under ₹45 lakh with a carpet area under 60 sqm in metros (90 sqm in non-metros) attract zero GST.

Key market trends

• Supply has collapsed. Affordable housing's share of new launches has fallen sharply since 2018, as developer economics moved against the segment.
• Tier-2 and tier-3 cities are the growth story. With metros priced out, smaller cities are where affordable supply and demand still meet.
• The aspiration persists. Owning a home remains a defining goal for lower-income households, regardless of market conditions.

What is driving affordable-segment buyers?

• The affordability crunch. Land and construction costs have surged, and subsidy amounts have not kept pace with that inflation.
• Location and connectivity. Buyers need access to jobs, schools, healthcare and public transport. A cheap home far from work is not actually cheap.
• Government support. PMAY-U 2.0 provides financial assistance of up to ₹2.5 lakh for construction, plus interest subsidy on home loans through the Credit Linked Subsidy Scheme.
• Financing access. Affordable home loans and manageable interest rates are often the deciding factor.
• Urban migration. As cities expand, demand for affordable housing keeps rising in urban and semi-urban areas.

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Where is affordable housing heading?

• PMAY-U 2.0 is scaling. Launched in September 2024, the scheme targets one crore additional urban homes over five years. As of mid-2026, over 16 lakh houses had been sanctioned under PMAY-U 2.0 (Ministry of Housing and Urban Affairs). Roughly 95% of all sanctioned houses across both PMAY-U phases are in active construction, and about 78% are complete.
• Implementation pace is the real variable. The scheme exists and is funded. How fast it moves varies considerably between states.
• Technology can help. Prefabrication, modular construction and alternative materials can bring costs down and shorten timelines.
• Sustainability is entering the segment. Energy-efficient design reduces long-term living costs, which matters more here than anywhere else.

What should affordable-housing developers prioritise?

Cost efficiency. Adopt prefabrication and modular construction. Offer tiered pricing with flexible payment plans. Build PMAY-U 2.0 eligibility into your sales process rather than leaving buyers to figure it out.

Growth corridors. Focus on tier-2 and tier-3 cities where land costs allow the maths to work. Position near transport hubs and employment centres. Track upcoming government infrastructure and get there first.

Thoughtful design. Maximise space efficiency without sacrificing comfort. Prioritise natural light, ventilation and shared community spaces. Get water supply, waste management and security right from the start.

Financing solutions. Partner with banks on low down-payment options. Educate buyers on the schemes they qualify for. Consider rent-to-own or staggered payment models.

Trust and transparency. Comply fully with RERA. Communicate clearly on pricing, timelines and quality. Offer digital documentation and virtual site visits.

How do RERA, GST and PMAY affect Indian property buyers?

Three policies shape the Indian property market more than any others. RERA governs how projects are registered and funded. GST determines what tax a buyer pays. PMAY determines who gets a subsidy.

The policies that matter

• RERA (Real Estate Regulation and Development Act). Brought in during 2016, RERA cleaned up a messy market. Projects must be registered. Funds must sit in escrow. Buyers now trust the process far more than they used to.
• GST (Goods and Services Tax). Since 2017, GST has replaced a tangle of older taxes with one system. Developers spend less on tax overhead. Buyers face fewer forms. Properties under ₹45 lakh with carpet area under 60 sqm in metros attract zero GST.
• PMAY-U 2.0 (Pradhan Mantri Awas Yojana, Urban). Launched in September 2024, this phase targets one crore urban homes over five years, from 2024 to 2029. It covers EWS, LIG and MIG households and offers assistance of up to ₹2.5 lakh plus interest subsidy on home loans. The original PMAY-U scheme runs until 30 September 2026 for completion of already-sanctioned homes.
• SWAMIH Fund. By putting liquidity into stalled projects, this has revived construction and reassured buyers in the mid-segment.
• Tax and FDI reforms. Home loan deductions encourage purchase. Relaxed FDI norms have opened Indian real estate to global capital.
• Infrastructure spending. Expressways, metro expansions and smart city projects have improved connectivity and lifted property demand along those corridors.

How are demographics changing Indian housing demand?

Demographic change is reshaping what gets built and where. A younger, wealthier middle class is driving demand in luxury and mid-segment housing. Rapid urban migration keeps affordable demand high. And household structures themselves are changing.

• A larger, richer middle class. Rising disposable income is pushing more households into the mid and premium segments.
• Urbanisation and suburban growth. Migration to cities drives housing demand, while affordability pushes that demand into suburbs and smaller cities.
• Millennial and Gen Z preferences. Younger buyers prioritise convenience, community and lifestyle. Many rent early in their careers and buy later. They expect tech-enabled homes. We go deeper into how AI is changing real estate market trends and buyer behaviour.
• Emerging LGBTQ+ homebuyers. The CREDAI-MCHI Property Expo 2025 openly advocated for LGBTQ+ homeownership, introducing inclusive housing projects and non-discriminatory home loan policies. It marks a real step toward inclusivity in Indian real estate.
• Senior housing demand. India's ageing population is creating demand for senior living communities and retirement-friendly developments.
• Changing household structures. Nuclear families and solo living are pushing demand toward compact homes, serviced apartments and co-living.
• Sustainability and smart homes. Younger buyers are environmentally conscious and digitally native. Green certification and smart technology are becoming genuine differentiators.

How are prices and interest rates affecting buyers?

The economic picture affects each segment differently.

Luxury and ultra-luxury. Demand from HNIs and NRIs remains strong. Economic volatility can influence investment appetite and foreign capital flows, but this segment has proved the most resilient.

Mid-segment. This is where the squeeze is sharpest. Prices rose 54% between 2019 and 2024 while incomes did not keep pace. Borrowing costs add to the pressure. The result is deferred purchases and a shift toward renting.

Affordable. Construction cost inflation is the core problem. Subsidy amounts have not risen in line with land and material costs. Demand remains strong, but formal supply is thin.

One encouraging signal: price growth moderated to around 8% in 2025, after the sharp run-up of the previous five years. That points to a more sustainable, end-user-driven market.

What are the key Indian real estate trends in {YEAR}?

Three things shape Indian real estate right now. The economy. The changing population. Government policy.

Luxury is booming. Wealthy buyers and NRIs keep pushing it higher, and the segment has broadened well beyond Mumbai.

Mid-segment and affordable housing face a price problem. Both are holding up, helped by government schemes and buyers who refuse to give up on owning a home.

Cities keep growing. Younger buyers keep changing the rules. Developers who move with them will win.

Key takeaways

• Luxury and ultra-luxury. Homes above ₹4 crore have gone from 1 to 2% of sales pre-pandemic to 18 to 20% today. Integrated townships, smart homes and sustainable design are shaping the segment's future.
• Mid-segment. Affordability pressure and remote work are moving demand to suburbs and tier-2 and tier-3 cities. Price growth has stabilised at around 8%.
• Affordable housing. Supply has contracted sharply while demand persists. PMAY-U 2.0 and RERA are the main counterweights. Construction technology will decide whether the segment recovers.
• The market is consolidating. Grade-A developers now hold around 45% of supply, up from 28% five years ago. Buyer trust is concentrating in fewer hands.

The path forward

Success comes down to three habits. Watch what buyers want. Try new things. Use the schemes the government already offers.

Do all three and the hard parts get easier. New markets open up. The upside is large.

Partner with Nine Degree for real estate marketing that delivers

In a fast-changing market, the right marketing strategy makes the difference between a project that sells and one that sits. At Nine Degree, we specialise in full-funnel marketing, brand positioning and data-driven strategy. We help developers, investors and real estate brands connect with buyers, maximise sales and build lasting market presence.

If you are still weighing options, our guide on how to choose the right real estate marketing agency for your project sets out what to look for.

Let's shape the future of real estate together. Get in touch with us to elevate your brand and drive impact.

About Nine Degree

Nine Degree is a full-service marketing consultancy with over 20 years of experience across real estate, construction and manufacturing. Our expertise spans brand strategy, sales activation, digital marketing and customer engagement. We help businesses build marketing engines that produce results, with every strategy grounded in insight rather than guesswork.

Frequently Asked Questions

1. What are the three main segments of the Indian real estate market?

India's property market splits into three parts.

Luxury and ultra-luxury covers homes above ₹1 crore. Mid-segment sits between ₹60 lakh and ₹1 crore. Affordable housing means homes under ₹50 lakh.

Each group buys for different reasons. Luxury buyers chase status and wealth protection. Mid-segment buyers watch every rupee. Affordable buyers depend on government schemes and easy loans.

Know the difference and you can market to each group properly. Treat them the same and you reach no one.

2. What is driving the growth of luxury real estate in India?

Four things. India now has around 13,600 ultra-high-net-worth individuals who put roughly 32% of their portfolios into real estate. NRI demand remains strong. Prime land in metros is scarce. And buyers increasingly want bespoke design and smart-home technology rather than standard units.

The scale of the shift is striking. Homes above ₹4 crore have gone from 1 to 2% of total sales before the pandemic to 18 to 20% today. Ultra-luxury homes above ₹40 crore saw sales jump 66% in 2025.

3. Why is affordability a problem in India's mid-segment housing market?

Prices rose faster than incomes. Average residential prices surged 54% between 2019 and 2024, while salary growth did not keep pace.

The effect shows in the numbers. Homes below ₹75 lakh have fallen to 32% of sales, down from nearly 60% in 2021. Buyers have responded by renting longer, moving to suburbs and tier-2 cities, or delaying the purchase.

Price growth moderated to around 8% in 2025, which suggests the market is stabilising rather than continuing to run away.

4. How have RERA and PMAY changed the Indian real estate sector?

RERA, introduced in 2016, made project registration mandatory and required developer funds to sit in escrow. That single change did more for buyer confidence than any marketing campaign could.

PMAY-U 2.0, launched in September 2024, targets one crore urban homes over five years. It offers assistance of up to ₹2.5 lakh plus interest subsidy on home loans for EWS, LIG and MIG households. As of mid-2026, over 16 lakh homes had been sanctioned under this phase.

Together with GST simplification and the SWAMIH Fund for stalled projects, these policies have made Indian real estate a more transparent sector than it was a decade ago.

5. How are changing demographics influencing housing demand in India?

A growing middle class is lifting demand in the mid and premium segments. Urban migration continues to drive affordable housing need, particularly in tier-2 and tier-3 cities.

Younger buyers are changing the pattern most. Millennials and Gen Z rent longer, buy later, and expect tech-enabled homes in walkable communities. At the same time, an ageing population is creating demand for senior living, and the rise of nuclear families and solo living is pushing interest toward compact homes and co-living.

6. Is it better to rent or buy a home in India in {YEAR}?

It depends on the city and how long you plan to stay.

In metros where prices have outpaced income growth, renting is often the more sensible short-term choice. That is exactly why many younger buyers are deferring purchase.

Buying tends to win if you plan to stay more than seven years, if rental yields are low relative to your likely EMI, or if you qualify for a PMAY-U 2.0 subsidy. Run the numbers on total EMI including interest against total rent over your expected stay. Factor in the opportunity cost of the down payment.

7. Which Indian cities offer the best value for mid-segment homebuyers?

Suburban belts around metros and tier-2 and tier-3 cities currently offer the strongest value. Metro affordability has pushed demand outward, and improved road and metro connectivity has made these locations workable for daily commuting.

Hyderabad, Bengaluru and Chennai have all emerged as serious markets in their own right, with Hyderabad in particular showing strength on competitive pricing and larger property sizes.

Look for projects near transit hubs, IT corridors and employment zones rather than judging on price per square foot alone.

8. What should NRIs know before buying property in India?

NRIs can buy residential and commercial property in India without special permission. Agricultural land, plantations and farmhouses are restricted.

Payments must be made through normal banking channels or NRE and NRO accounts. Verify that the project is RERA-registered. Get the title checked independently rather than relying on the developer's assurance. Appoint a power of attorney if you cannot complete formalities in person.

Many developers now run dedicated NRI desks offering remote buying and legal support, which is worth asking about before you shortlist.