India's Real Estate Landscape: Premium Properties Dominate, Affordable Housing Emerging

India's housing market is currently experiencing a significant upturn, particularly within the luxury sector. Property experts are predicting a steady rise in home prices, fueled by increasing demand for premium residences.

This trend highlights the robust nature of India's real estate market, aligning with the country's overall economic strength.

Luxury Segment Fuels Growth

The demand for high-end apartments is being driven by India's affluent population. This market segment is seeing substantial growth, with projections indicating a six percent annual increase in average home prices over the next two years.

This follows a solid 4.3 percent rise in 2023, showcasing the market's resilience.

Ankita Sood, Director and Head of Research at REA India, notes that "consistent demand and limited ready supply" are creating a favourable market environment. High-income buyers and investors are particularly active in the luxury segment, which now represents about 28 percent of total sales, up from 15-16 percent pre-pandemic. This surge reflects a confident and optimistic market outlook.

Promising Prospects for First-Time Homebuyers

For those looking to purchase their first home, there is encouraging news. Efforts to improve housing affordability are gaining traction. Government initiatives to boost the supply of affordable homes, combined with rising incomes in major cities like Mumbai and Delhi, are creating a more positive outlook for first-time buyers. CBRE's Atif Khan foresees a favourable shift in affordability, making homeownership more attainable.

Addressing Market Challenges

India's housing market is at a critical juncture, with escalating land prices presenting significant challenges. Developers are increasingly exploring innovative solutions to tackle these issues, while government efforts continue to focus on bridging the gap between luxury and affordable housing.

Rohan Sharma, Director at JLL Research, emphasises the importance of "cooperation among stakeholders" to create a balanced and inclusive housing sector.

A Bright Future Ahead

The Indian housing market holds substantial potential for growth and advancement. The flourishing luxury segment is bolstering overall market confidence, attracting more investment and supporting a healthy economic environment.

As the market evolves, collaboration among policymakers, developers, and financial institutions will be key to developing a sustainable and inclusive housing ecosystem that meets the needs of all societal segments.