Premium Housing Demand Rises Despite 12% Dip in Overall Residential Sales in 2025 Breakthrough

Supply, Launches And Inventory Tightening At The Mid-Market

a cautious stance in the more volume-sensitive segments. Rental yields and capital-appreciation prospects in premium locales are proving stronger, drawing both end-users and investor interest From the supply side, the number of new homes launched in January-September 2025 across major cities stood at around 225,001 units, only marginally (−1 per cent) lower than the prior year when dissected by price bracket, the premium segment (₹1 crore +) saw meaningful growth in launches: in the ₹10.5-30 million (~₹1.05-3 crore) band, growth touched nearly 10 per cent Y-on-Y. Meanwhile, launches in the sub-₹10 million (~₹1 crore) range have been cut back as developers recognise slower absorption.

This cautious stance has helped restrain inventory build-up in the mid-segment and has prevented major oversupply. According to JLL, unsold inventory grew only modestly a sign that while volumes are softer, the market is not flooded with unsold stock. upshot is a landscape where premium homes command stronger margins and faster turnaround, and developers are aligning accordingly Prices continue to edge upward across all major markets, driven by premium-end demand, higher land and construction costs, and developer preference for higher-margin projects. In the third quarter of 2025, home prices in the seven major cities rose between 6–16 percent annually16 per cent.

Regional Dynamics Metros Dominate 

Chennai 14 per cent; Delhi NCR and Bengaluru each at about 13 per cent. Q2 2025, the semi-annual price growth was similarly broad-based and robust Because premium homes dominate new launches, the average ticket size is increasing meaning markets are skewing toward fewer but more expensive homes. This has major implications for affordability and for the mid-segment buyer The top three cities Bengaluru, Mumbai and Pune accounted for approximately 63 per cent of total home sales in this period, up from about 60 per cent the year before Pune and Chennai posted growth even while other cities slowed: Pune +14 per cent; Chennai +13 Delhi NCR and Mumbai.

Have experienced more muted growth or outright decline in new launches, though they remain leaders in overall volume This concentration reinforces the fact that premium-housing demand is especially potent in metros and strong secondary cities rather than uniformly across India For buyers, the trend signals that entry-level and mid-segment housing is becoming tougher: fewer launches, slower absorption, and downward risk in demand. If you are looking in the sub-₹1 crore bracket, you may face longer wait-times or choose from more limited high-quality options. If you are able to move into the premium bracket (₹1 crore+), you are increasingly in a segment.

Where supply is greater and competition stiffer among higher-income buyers. Resale value, project reputation and location are becoming even more critical For developers, the logic is clear: higher ticket size higher margins lower volume risk. Many are consciously shifting their pipeline toward (Nitti) premium residential projects, reducing focus on large-volume affordable/mid-segment launches. This reduces oversupply risk, enhances brand equity and supports pricing power From a policy perspective, the shift raises questions about housing affordability and whether the mid-market historically the engine of “mass housing” demand is being neglected. While the premium market.

thrives, what happens to affordable housing? Governments and regulators may need to recalibrate incentives to ensure balanced housing supply across income segments and geographies. Additionally, urban infrastructure — transport, schools, hospitals will need to scale to support higher-end township living as well as mass-market housing the market seems set for a plateau or a moderate up-cycle rather than explosive growth. As Knight Frank India notes, the current buying trend is entering a “fifth year of up-cycle” and may shift into a more stable phase with volumes flattening but prices and value resilient The premium segment will likely continue to outperform.

Given low inventory, gated community trends, lifestyle amenities, and strong developer brands. However growth rates may moderate compared with previous years while total residential unit sales in India have dipped by about a dozen per cent in early 2025, the premium housing (Serene Communities) segment is holding firm and even growing. That divergence is reshaping how housing markets operate: fewer but higher value homes, concentrated demand in certain metros, selective launches, and stronger pricing power. Developers, investors and home-buyers alike will need to recognise this bifurcation the mass-market is under pressure, the premium market is leading and strategies accordingly.