How luxury is reshaping India's housing market in 2025

The second quarter (Q2) of 2025 has brought the trends of the first half of the year (H1) into sharp focus. While the total number of homes sold was 13% lower than last year’s record highs, this statistic doesn't tell the whole story. The real story is in the premium segment, which is booming, setting a new course for the industry.

 

1. Luxury homes take the lead

While the overall market saw a dip, demand for high-end properties surged, signaling strong buyer confidence in long-term value. This trend was clear across several metrics from H1:

• A new majority: Homes priced at ₹1 crore and above accounted for a remarkable 62% of all sales, a significant jump from 51% last year.

• High-end growth: The momentum was driven by impressive sales growth in the most expensive categories, with the ₹3 crore -₹5 crore range growing by 14% and the ultra-luxury segment above ₹5 crore growing by 8%.

• Key market concentration: This high-end activity was most intense in a few hubs, with Bengaluru, Mumbai, and Pune alone making up a massive 63% of all homes sold during H1.

 

2. Developers pivot to luxury

In response to market conditions, developers launched fewer projects overall but made a pivot to meet the new demand for quality. New projects in the premium segment, defined as those priced at ₹1 crore and above, surged by an incredible 110% compared to last year.

This shift was led by India's tech hubs. In H1, Bengaluru, Chennai, Hyderabad, and Pune accounted for 62% of all new homes launched. That momentum carried through Q2 specifically, where these same cities comprised 59% of launches, highlighting their importance to the national market.

 

3. Home prices continue to climb

Steady demand for high-quality homes continued to push property values upward. Price growth was seen across the country in Q2, with Delhi NCR leading the way at 17% year-on-year. Bengaluru followed closely with a 14% increase, while Chennai and Kolkata also saw strong appreciation of around 11%.

 

4. A faster, more efficient market

Despite a softer sales pace, the market actually became more efficient. The time it takes to sell an available property has dropped from 24 months to just 22 months over the last year. This means that even with fewer total buyers, the right properties are selling more quickly, creating a balanced and healthy market.

5. Major investors signal confidence

It’s not just homebuyers who are confident. Major investment funds are also betting on the sector's long-term health. While the total investment of USD 1.2 billion in H1 was 27% lower than last year's record highs, a closer look at the type of investment reveals a more telling trend. Nearly 60% of it was direct ownership (equity), showing that investors expect property values to rise. A perfect example is Blackstone's recent investment in developer Kolte-Patil. Coming from one of the world's largest investment firms, this move is a clear vote of confidence in the sector.

 

6. What's next for the housing market?

The outlook for the rest of the year remains positive, pointing to a more mature and stable phase of growth. The market will likely see continued price stability, supported by favorable economic conditions like lower interest rates and moderating inflation. The trend of established national developers partnering with smaller, local builders is also expected to continue, bringing trusted brand names to new locations, a win for homebuyers. Overall, the market is set to be defined by quality, not just quantity.

 

FAQs (Frequently Asked Questions)

 

1. Why is the luxury housing segment growing so rapidly in India in 2025?
The luxury housing segment is expanding due to rising disposable incomes, strong NRI interest, a preference for larger and high-quality homes post-pandemic, and developers focusing on premium launches. Tech-driven cities like Bengaluru, Pune, and Hyderabad are major contributors.

2. What price range qualifies as a luxury home in India today?
In most metros, luxury homes start at ₹1 crore, while ultra-luxury properties typically begin at ₹5 crore and above. The ₹3 to ₹5 crore bracket has shown the strongest growth in H1 2025.

3. How did luxury homes perform in comparison to the overall housing market?
While overall home sales fell by 13% YoY, luxury homes surged and accounted for 62% of total sales up from 51% last year indicating a clear shift toward premium living.

4. Which cities are witnessing the highest luxury housing demand in 2025?
Bengaluru, Mumbai, and Pune collectively contributed 63% of total homes sold in H1 2025, making them the top luxury real estate hubs. Chennai and Hyderabad also saw strong premium launches.

5. Are property prices increasing in 2025?
Yes. All major cities saw price appreciation, led by Delhi NCR (17% YoY), followed by Bengaluru (14%), and Chennai and Kolkata (11%). Premium supply and strong demand continue to drive prices upward.

6. Why are developers launching more luxury-focused projects?
Developers are responding to the surge in premium demand. New launches priced above ₹1 crore increased by 110% YoY, while mass-market launches slowed. Buyers today prefer branded, spacious, amenity-rich homes.

7. Has the time to sell luxury homes improved?

Yes. The overall market has become more efficient, the inventory sell-through time reduced from 24 months to 22 months, meaning homes in the right segment are selling faster.

8. Are institutional investors supporting this luxury-led growth?
Absolutely. Despite a 27% drop in total investments, nearly 60% of all funding was equity-based, showing long-term confidence. Blackstone’s investment in Kolte-Patil is a strong endorsement of the sector.

9. Will luxury housing continue dominating the market in the coming months?
Yes. With lower interest rates, stable inflation, and growing preference for premium living, luxury housing is expected to remain the strongest-performing segment through 2025.

10. Do these insights apply to all types of homes?
No. The analysis includes apartments only, excluding villas, row houses, and plotted developments. Market trends may differ for independent housing formats.

 

 

Please Note: Data includes apartments only. Rowhouses, villas, and plotted developments are excluded from this analysis. City groupings are as follows: Mumbai (Mumbai city, Mumbai suburbs, Thane city, and Navi Mumbai); Delhi NCR (Delhi, Gurugram, Noida, Greater Noida, Ghaziabad, Faridabad, and Sohna).

 

 

Source: JLL Research Paper 2025 (Q2)

Author & Editor: JLL Primary Team | Sumedha Das