SEOKeyword – India’s Housing Market Enters Premium Phase as Price Growth Slows Ahead
SEOKeyword – India’s residential real estate sector is witnessing a clear transition toward premium housing, with buyers increasingly opting for higher-value properties even as overall sales volumes grow at a slower pace. A recent report by Nuvama indicates that while demand remains healthy in value terms, the pace of home price growth is likely to ease during CY26 as affordability challenges continue to influence the market.
Housing Sales Show Strong Value Growth
According to the report, the total value of housing sales across major Indian cities increased by 17 percent year-on-year in May 2026, while registering a 2 percent rise compared to the previous month. In contrast, the number of homes sold recorded a comparatively modest annual increase of 6 percent. Southern markets emerged as the strongest performers during the period, reflecting sustained buyer interest in the region.
For the year-to-date period of CY26, housing demand measured by sales value climbed 13 percent from a year earlier. Bengaluru led the growth with a 39 percent annual increase, followed by Chennai at 26 percent. Kolkata and the Mumbai Metropolitan Region also reported healthy improvements of around 11 to 13 percent, while other leading property markets posted gains ranging between 4 and 8 percent.
New Project Launches Continue to Decline
Despite healthy demand, developers introduced fewer residential projects during May. Nuvama reported that the value of new housing launches declined 18 percent year-on-year and 12 percent month-on-month. Hyderabad was the only major city to record growth in new project launches, while every other key market experienced a slowdown.
On a volume basis, new housing launches across the country’s top seven cities fell by 14 percent compared with both the previous year and the preceding month. The decline suggests that developers remain cautious about expanding supply despite steady buyer activity in premium segments.
Premium Homes Drive Market Momentum
The report highlights that India’s housing market is increasingly being shaped by premiumisation. Buyers are showing greater preference for larger and more expensive homes, resulting in faster growth in sales value than in the number of residential units sold.
This trend is reflected in the gap between value growth and volume growth. While housing sales value advanced by 17 percent in May, sales volumes rose by only 6 percent, indicating that higher-priced properties continue to dominate market activity.
Luxury and premium housing also remained the primary contributors to price appreciation across major cities. Average residential prices increased by approximately 18 to 19 percent in both the National Capital Region and Chennai during May, while Bengaluru recorded an annual price rise of around 11 percent. Larger apartment sizes combined with higher property prices have significantly increased the average ticket size for home purchases across several markets.
Affordability Challenges May Limit Future Growth
Nuvama believes that structural issues are likely to keep housing volumes under pressure in the near future. Rising property prices, declining affordability, limited availability of homes in the mid-income category, and relatively weak employment growth amid global trade uncertainties are expected to weigh on broader demand.
The report suggests that stronger sales volumes may only return if developers shift greater attention toward the mid-income and premium housing categories instead of concentrating heavily on luxury projects. It also recommends keeping home prices and ticket sizes under control to improve affordability for a larger section of buyers.
Looking ahead, Nuvama expects residential property prices to continue rising during CY26 but at a much slower pace than seen in recent years. The report forecasts that annual price appreciation is likely to remain in the mid-single-digit range, indicating a more balanced phase for India’s housing market after an extended period of rapid gains