Luxury Housing Booms as Affordable and Mid-Segment Buyers Retreat

India’s housing market is increasingly being driven by the wealthy, with luxury homes priced above ₹2 crore recording a 24% jump in sales and ultra-luxury units above ₹10 crore rising by 40%. However, this surge masks deep stress in the broader market, where affordable homes (₹30–50 lakh) and mid-segment units (₹50–75 lakh) have seen sales volumes fall by 13% and 7%, respectively. While overall sales values grew due to rising prices and high-value transactions, the actual number of units sold showed little growth, indicating weakening demand from the middle class.

Market reports from Liases Foras, Knight Frank and Anarock reveal a consistent pattern: mass-market housing is slowing while luxury homes prop up topline numbers. Key markets like Pune recorded a sharp drop in registrations and stamp duty collections, and nationwide housing sales for FY25 fell 14% year-on-year. The trend continued into FY26’s first half, with only 1.93 lakh units sold, far below the previous year’s pace. Despite luxury demand lifting overall sales value, the removal of these top-end purchases exposes significant stress in the mainstream market.

Construction delays and stalled projects are adding to the pressure. The share of completed supply in major cities has dropped from 75% in 2017 to just 57% in 2025, raising concerns over delivery timelines. Nearly 5 lakh units are stalled across 42 cities, primarily in the affordable and mid-income categories. Redevelopment has become the go-to solution for land scarcity in metros like Mumbai, but comes with high costs, legal challenges and displacement issues. With inadequate government intervention and rising risks for buyers, securing a home—especially for the middle and lower segments—is becoming increasingly difficult.

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