Luxury Housing Dominates Price Growth and Demand in Leading Indian Cities
The luxury housing market in India is experiencing significant growth, outpacing the affordable housing segment in major cities. According to property consultant ANAROCK, luxury homes priced over Rs 1.5 crore have seen a remarkable 40% increase since 2022, while affordable housing has only appreciated by 26%. This trend reflects a strong demand for larger homes in prime locations, driven by a growing number of high-net-worth individuals (HNIs) in the country.
Luxury Housing Demand Surges
The demand for luxury homes in India’s top seven cities—Delhi NCR, Mumbai MMR, Kolkata, Pune, Hyderabad, and Chennai—has shown a consistent upward trajectory. ANAROCK reports that nearly 30% of the total sales, amounting to approximately 2.9 lakh units in the first nine months of 2025, were in the luxury segment. This surge is particularly notable given the overall increase in home prices across the nation, attributed to rising input costs and robust demand. Anuj Puri, chairman of ANAROCK, emphasized that the luxury segment’s growth is sustainable, supported by India’s increasing number of HNIs and ultra-HNIs.
Price Increases in Luxury Segment
The average price of luxury homes in the top seven cities has escalated significantly, from Rs 14,530 per square foot in 2022 to Rs 20,300 per square foot in 2025. Notably, Delhi NCR recorded the highest price increase of 72%, with prices rising from Rs 13,450 per square foot to Rs 23,100 per square foot over three years. The Mumbai MMR and Bengaluru markets also saw substantial increases, with prices rising by 43% and 42%, respectively. In Mumbai, the average price for luxury homes jumped from Rs 28,044 per square foot in 2022 to Rs 40,200 per square foot, while Bengaluru’s prices rose from Rs 11,760 to Rs 16,700 per square foot.
Affordable Housing Market Struggles
In contrast, the affordable housing segment, defined as units priced under Rs 40 lakh, has experienced a modest price appreciation of 26%. The average price in this category rose from Rs 4,220 per square foot in 2022 to Rs 5,299 per square foot currently. The National Capital Region (NCR) led the affordable segment with a 48% increase, while Hyderabad followed with a 35% rise. Despite these increases, the affordable housing market continues to lag behind luxury housing in terms of demand and sales, reflecting a broader trend of limited interest in budget homes.
Market Dynamics and Future Outlook
The current trends indicate that the luxury housing market is poised for continued growth, driven by India’s expanding wealth and economic stability. The mid-range and premium segments, priced between Rs 40 lakh and Rs 1.5 crore, also saw a notable price increase of 39%, rising from Rs 6,880 per square foot in 2022 to Rs 9,537 per square foot in 2025. Puri highlighted NCR’s exceptional performance across all real estate segments, noting its remarkable price appreciation in luxury, mid-range, and affordable categories. As the market evolves, the luxury segment appears to be well-positioned for sustained growth, while the affordable housing sector faces ongoing challenges.
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