India's luxury housing boom to lift home prices, squeezing affordability further

BENGALURU: Average home prices in India are expected to climb 5% each ​year through 2028, as developers double ​down on high-end projects in a market increasingly shaped by rich buyers, ​a Reuters poll of property analysts showed.

Those estimates compare with gains of 6% for 2026 and 5% for 2027 predicted in the previous poll in December.

It is, however, higher than a 3.6% increase in 2025, according ‌to Reuters ⁠calculations based ⁠on the Reserve Bank of India's House Price Index.


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Demand in India has been largely driven by the wealthy, a small ​subset of the population, with developers having little incentive to build affordable homes for younger first-time buyers.

"It makes more economic sense for the developer to focus on premium housing ... because the ability of customers in the premium housing segment is much higher to absorb the price shock," said Vivek Rathi, national director of research at Knight Frank.

Most analysts ⁠classify premium ‌housing as homes priced above 10 million rupees, nearly 40 times India's ​average national per ​capita income.

Homes priced in that category accounted for 63% of total ⁠sales in 2025, up from 53% a year earlier, even as ​overall residential sales fell 11%. Meanwhile, demand for homes priced below ​10 million rupees plunged 31%, according to a JLL report.

The survey, conducted February 23 - March 10, showed home prices in major urban centres - Mumbai, Delhi, the National Capital Region, Bengaluru and Chennai - are expected to rise 5%-7% over the next three years.

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The supply of luxury homes is likely to either rise or remain unchanged this year, according to 12 of the ‌14 analysts polled, while two expected a decline.

Ten analysts said demand would either increase or stay the same, while four said it would drop.

Avneesh Sood, ​director at Delhi-based ​Eros Group, said home ⁠prices were rising faster than incomes, particularly in major cities, adding "middle- and lower-income demographics are being marginalised into a rental trap, forcing a larger proportion of the population to remain in ​the rental pool for much longer periods."

Poll medians showed average urban rents were expected to rise 6%-8% over the coming year, at least twice the country's consumer inflation rate.

Square Yards' Sunita Mishra, Savills' Arvind Nandan, Colliers International's Ajay Sharma and ANAROCK's Anuj Puri expect rents to rise 7%-15%.