Premium Homes Take the Spotlight in India’s Real Estate Market
India’s housing sector is buzzing with energy again and this time, premium homes are stealing the show. According to the latest India Real Estate Update by Knight Frank India, homes priced between ₹1–2 crore have emerged as the strongest driver of demand in Q3 2025. In fact, this segment alone accounted for 28% of total residential sales across India’s top eight markets.
With robust sales, steady price growth, and a clear shift in buyer preferences, the premium housing segment is now shaping the future of the real estate landscape.
Premium Homes Fuel India’s Property Growth
Premium homes are no longer a niche; they’re the new mainstream. In Q3 2025, total residential sales touched 87,603 units, reflecting a 1% year-on-year (YoY) growth despite a minor dip in new launches.
Interestingly, homes priced above ₹1 crore made up 52% of total sales, a sharp rise from 46% a year ago. The ₹1–2 crore price band led the charge with 17% YoY growth, clearly showing that more homebuyers now aspire to own bigger, better, and more luxurious spaces.
New Launches Dip Slightly but Demand Holds Strong
Although demand remains robust, supply saw a 2% YoY dip, with new launches totaling 88,655 units. Cities like Chennai and Bengaluru bucked the trend, posting impressive 44% and 28% growth in launches, respectively.
However, major hubs like Mumbai and NCR experienced a 19% drop, slightly pulling down the overall supply numbers. Yet, thanks to consistent end-user demand, the market’s Quarters to Sell (QTS) stayed healthy at 5.8 quarters indicating about 18 months of available inventory.
Why Premium Housing Is Rising Fast
Multiple economic tailwinds are pushing this surge. Inflation cooled to 2.07% in August 2025, while the repo rate fell by 100 basis points compared to the end of 2024. With liquidity improving and borrowing becoming cheaper, homebuyers are confidently stepping into the premium segment.
Moreover, as urban buyers seek more spacious and high-quality homes, the demand for ₹1–2 crore properties has grown stronger. These homes perfectly balance luxury, location, and long-term investment value — making them the sweet spot for buyers.
City-Wise Trends: Mumbai Leads, Chennai Shines
Among the top eight residential markets, Mumbai retained its crown with 24,706 units sold in Q3, making up 28% of total sales. Chennai emerged as the star performer with a 12% YoY jump, marking its highest sales since the pandemic.
Meanwhile, Bengaluru and Delhi NCR remained steady, while Pune recorded a slight dip of 8% in sales. Year-to-date numbers reveal a healthy 2.58 lakh units sold across India’s major markets just 1% lower than the previous year, showing resilience despite global economic uncertainties.
Premium vs Affordable: A Structural Shift
While the premium segment flourishes, affordable housing is witnessing a slowdown. Homes priced below ₹50 lakh dropped 16% YoY, as urban buyers increasingly prioritize quality living spaces over entry-level units.
The luxury and ultra-luxury segments priced between ₹10–20 crore also saw a remarkable 170% surge in sales on a smaller base. This clearly signals that the Indian housing market is undergoing a structural shift towards higher-value properties.
Prices Keep Climbing in Major Cities
Residential prices continue to rise steadily across major cities, with NCR leading the way at 19% YoY growth. Here’s a quick look at how key markets performed:
- NCR: +19% YoY
- Bengaluru: +15% YoY
- Hyderabad: +13% YoY
- Chennai: +9% YoY
- Kolkata: +8% YoY
- Mumbai: +7% YoY
This price momentum reflects both developer confidence and buyer readiness to pay more for quality homes. With limited new supply in prime locations, this upward trend is likely to continue through the next few quarters.
Expert Insight: What Industry Leaders Say
The rise of premium housing isn’t just a temporary trend it’s a reflection of changing aspirations. Today’s homebuyers are investing in comfort, connectivity, and quality of life. The ₹1–2 crore segment perfectly fits this evolving lifestyle. It’s smart real estate, not just luxury.
Sanjeev Singh, MD, SKJ Landbase
Sanjeev Singh’s perspective highlights why more Indians are moving towards well-planned, premium projects that offer long-term stability and value appreciation.
Outlook: A Stable Plateau with a Premium Edge
India’s housing market is entering a plateau phase defined by steady sales, sustained price growth, and strong interest in premium homes.
As interest rates stay favorable and economic confidence builds, the ₹1–2 crore price band will likely remain the dominant force in residential real estate. Developers are already adapting their strategies, focusing on creating lifestyle-driven communities that match modern buyer expectations.
Final Thoughts
The real estate boom in India is no longer just about affordability it’s about value, lifestyle, and long-term investment. Premium homes are setting the tone for a new era of urban living, where quality trumps quantity and aspirations drive demand.
With stable supply levels, consistent buyer interest, and a solid economic backdrop, the future of India’s housing sector looks promising and premium homes will continue to lead the way.
