The Changing Face of India’s Housing Story
India’s residential real estate market has entered a new era; one defined not just by the number of homes sold, but by the value of those homes.
According to latest FY26 projections, the total housing sales value across India’s top seven cities is expected to touch ₹6.65 lakh crore, a sharp 19% jump year-on-year.
However, there’s a twist, the number of units sold (volume) is expected to remain stagnant or see only marginal growth. This signals a crucial shift from quantity to quality, from affordability to aspiration, and from volume to value.

I. Section 1: Understanding the “volume vs value” shift
For years, India’s housing growth story revolved around volume; developers focused on selling maximum units, catering largely to mid-income and affordable buyers.
But between 2023 and 2025 end, the dynamics changed dramatically.

I.I What’s behind the shift?
• Rising incomes and aspiration among urban professionals and entrepreneurs
• Limited new landsupply in city cores, pushing up per-unit pricing
• Developer consolidation, reducing low-margin affordable projects
• Influx of HNIs, NRIs, and institutionalinvestors into premium housing

II.Section 2: FY26 the year of value-led growth


Fig 1. Sales, value, and share of luxury comparison (FY 25 & FY 26)

So even as the number of homes sold is nearly unchanged, the value of transactions continues to soar, driven by bigger homes, better amenities, and higher price brackets.

Average ticket size in the top 7 cities increased from ₹1.05 crore to ₹1.2 crore between FY25 and FY26 showing a rise of 15%.

III. Section 3: City-wise trends (value hotspots of 2025-26)
Based on market reports and industry insights, here’s how India’s top 7 real estate cities are shaping up.

Key insight: Cities like Gurugram, Bengaluru, and Chennai are now the biggest drivers of luxury housing value, while MMR remains India’s most valuable but highly saturated residential market.

IV. Section 4: Why are buyers upgrading to premium and luxury homes?
The luxury housing surge isn’t accidental, it’s backed by deep behavioral and economic shifts.

1. Lifestyle upgrades post-COVID: After the pandemic, homebuyers began prioritizing space, design, and amenities over price. 3BHKs and 4BHKs in gated communities have replaced smaller flats in dense neighborhoods.

2. Wealth effect & dual-income households: India now has over 13 lakh HNIs, according to Hurun Report 2025. The rise of dual-income nuclear families and tech-driven entrepreneurship means more disposable income for housing upgrades.

3. Developer strategy: Top builders like DLF, Prestige, Sobha, Lodha, Godrej, and Tata Housing have consciously reduced exposure to affordable projects, focusing instead on fewer but high-margin luxury launches.

4. Limited supply & land scarcity: Prime city land has become prohibitively expensive. Developers prefer fewer, high-ticket projects that maximize returns rather than high-volume affordable projects.

5. NRI & investor influence: With the rupee stabilizing and global returns falling, NRI investors are parking more capital in luxury Indian real estate especially in Bengaluru, Gurugram, and Mumbai.

V. Section 5: The stagnation of volumes. Why is it not a bad news?
At first glance, stagnating unit sales might sound concerning. But flat volumes mask a healthier, more sustainable market.

1. Quality over quantity: Developers are not chasing unsustainable volumes or deep discounts. They’re focusing on financial discipline and timely completion; key for buyer trust.

2. Higher realizations per unit: The average ticket size has grown from ₹80 lakh in FY23 to over ₹1.2 crore in FY25-26, improving profitability and reducing unsold inventory pressure.

3. Improved buyer profile: More end-users and fewer speculative investors mean stable long-term ownership, ensuring better community development and reduced churn.

VI. Section 6: Impact on affordable and mid-segment housing
The shift to value, however, comes with challenges.

1. Shrinking affordable supply: Affordable housing (<₹50 lakh) now accounts for less than 18% of new supply in metro cities, down from 40% in FY20.

2. Financing challenges: Rising construction costs and higher interest rates have made it tougher for developers to launch sub-₹50 lakh homes profitably.

3. Urban imbalance: The luxury segment’s dominance could widen the housing gap for lower-income groups, especially in Tier-1 cities like Mumbai and Bengaluru.

However, Tier-2 cities like Indore, Lucknow, Coimbatore, and Jaipur are filling that void with affordable and mid-premium projects.

VII. Section 7: Developer and investor takeaways

VII.I For Developers:
• Focus on mixed-use luxury townships and gated communities with lifestyle amenities
• Invest in branded residences and serviced apartments
• Use data analytics to identify HNI/NRI buyer clusters

VII.II For Investors:
• Prioritize location and developer credibility over launch discounts
• Look for rental yield + appreciation potential in luxury micro-markets
• Diversify across premium mid-segment (₹1 to 2 crore range) for liquidity balance

VII.III For Policymakers:
• Encourage incentives for mid-income housing
• Promote urban redevelopment to make city cores livable again
• Balance high-end growth with inclusive housing policies

The Future: India’s Real Estate in FY26 and Beyond
The “volume-to-value” shift is not a short-term blip. It’s the new baseline for urban housing.
By FY26, experts expect:
• Luxury homes to form nearly 45 to 50% of total housing value
• Ticket sizes to rise another 10 to 12%, especially in metro markets
• Volume recovery likely only after 2026, as developers expand to Tier-2 cities
In short, India’s housing market is becoming smarter, leaner, and richer in value, mirroring the country’s rising economic and aspirational profile.

 

The New Real Estate Equation:The old real estate mantra was “sell more homes”, whilethe new one is “sell better homes.”
India’s real estate market in 2025-26 is rewriting its own growth story from the race for volumes to the pursuit of value. For developers, investors, and buyers alike, this is the time to think beyond square feet and focus on quality, aspiration, and long-term value creation.


FAQs (Frequently Asked Questions)

1. Why is India’s housing market focusing more on value than volume in FY26?
Because buyers are upgrading to premium homes, driving value growth even with stable volumes.

2. Which cities will lead India’s real estate value growth in 2026?
Gurugram, Bengaluru, and Chennai, followed by MMR and Hyderabad.

3. Will affordable housing make a comeback?
Possibly post-2026, when developers shift focus back to balance their portfolios.

4. What does this mean for first-time buyers?
Prices are rising faster than volumes, so early investment is key to avoid affordability pressure.

5. Is this trend sustainable?
Yes, as long as the demand for larger, lifestyle-oriented homes continues among upper-middle and luxury buyers.

6. How are developers adapting?
By launching high-margin luxury projects and reducing exposure to low-cost segments.

7. What role do NRIs play in this trend?
NRIs account for nearly 20% of luxury housing demand in metro cities.

8. Are luxury projects riskier for investors?
Slightly, due to higher entry cost and slower liquidity but long-term returns remain attractive.

9. How much of housing supply is now luxury or ultra-luxury?
Around 42% of new supply in H1 FY26, compared to 36% a year earlier.

10. What should homebuyers watch for in 2026?
Price escalation in premium micro-markets and growing opportunities in Tier-2 luxury corridors.

 

 

Source: IPC reports | JLL Research Report | JLL Primary Research | HT news article

Author & Editor: Sumedha Das