Premium housing emerges as middle-class sweet spot in India

Premium housing is now the middle-class choice in India, with prices up 40% in top cities as families seek better homes, amenities, and long-term value

Premium housing, once considered a luxury indulgence, is increasingly becoming the preferred choice for India’s middle class. Rising incomes, changing aspirations, and evolving urban lifestyles have shifted homebuying behaviour, with families now prioritising premium homes over traditional affordable options.

Recent market data highlights this transformation. The luxury housing segment continues to dominate India’s top seven cities, leading in both new supply and absorption. Price appreciation has been particularly strong, driven by sustained demand. According to ANAROCK Research, luxury homes recorded the highest average price growth of 40% over the past three years.

The National Capital Region (NCR) registered the sharpest increase, with prices rising by 48% between 2022 and 2025. In contrast, Hyderabad’s budget housing segment saw a 35% appreciation during the same period. Interestingly, affordable housing prices in Delhi-NCR remain slightly lower than those in Hyderabad, underscoring the strength of demand across different categories.

Across the top cities, average prices for premium homes rose from approximately INR 14,530 per sq. ft. in 2022 to INR 20,300 per sq. ft. in 2025. NCR’s luxury segment alone surged by 72%, while Mumbai Metropolitan Region (MMR) and Bengaluru followed with increases of 43% and 42% respectively.

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The shift towards premium housing accelerated after the COVID-19 pandemic, as middle-class buyers began stretching budgets by up to 20% to secure better homes. Improved connectivity, modern infrastructure, and lifestyle aspirations have further fuelled demand in urban centres such as Mumbai, Bengaluru, Pune, and Delhi-NCR. Tier-2 cities including Jaipur, Lucknow, Indore, and Coimbatore are also witnessing rising interest in branded townships and value-driven developments.

Today’s buyers are more discerning, focusing on credibility, amenities, and delivery assurance. Premium housing is no longer viewed as a status symbol but as a strategic investment in stability, enhanced living standards, and long-term wealth creation. Families are seeking homes that combine practical designs, reliable infrastructure, and manageable maintenance costs with strong financial returns.

Developers have responded by tailoring projects to meet these expectations, offering upgraded amenities, better layouts, and well-connected locations. The segment priced between INR 80 lakh and INR 1.5 crore has emerged as the most popular among upwardly mobile buyers, recording a 39% price hike in recent years.

Premium housing now represents the balance between aspiration and affordability, making it the middle-class sweet spot. For many families, it is not just about owning a home, but securing a lifestyle upgrade that ensures comfort, financial stability, and long-term value.

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