India's Housing Market Set for Sustained Price Growth Through 2028
Housing costs across India are poised to become significantly more expensive over the coming years, with average property prices expected to climb by approximately 5% annually until 2028. This projection emerges as developers increasingly pivot toward premium housing projects, fueled by robust demand from wealthy buyers, according to a comprehensive Reuters survey of property analysts.
Revised Projections and Market Momentum
The latest survey findings show a slight adjustment from the previous poll conducted in December, which had forecast price growth of 6% for 2026 and 5% for 2027. Despite this revised outlook, the anticipated increase remains substantially higher than the 3.6% rise recorded in 2025, based on Reuters calculations utilizing the Reserve Bank of India's House Price Index.
Analysts emphasize that the property market's current momentum is largely sustained by affluent purchasers, who constitute a relatively small fraction of the population. With this demographic demonstrating a greater capacity to absorb rising costs, developers have found little motivation to concentrate on constructing 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," explained Vivek Rathi, national director of research at Knight Frank.
Defining Premium Housing and Market Shifts
Premium housing is typically defined by analysts as properties priced above 10 million rupees, an amount that is nearly 40 times India's average national per capita income. In 2025, homes within this high-end category accounted for 63% of all residential sales, a notable increase from 53% in the preceding year. This surge in the share of premium housing occurred even as total residential sales experienced an 11% decline.
Conversely, the market for homes priced below 10 million rupees has weakened considerably. Demand for properties in this more affordable segment plummeted by 31%, according to a report by JLL.
Regional Variations and Supply-Demand Dynamics
The Reuters survey, conducted between February 23 and March 10, indicated that prices in major metropolitan housing markets—including Mumbai, Delhi, the National Capital Region, Bengaluru, and Chennai—are anticipated to increase between 5% and 7% over the next three years.
Regarding supply trends, most analysts anticipate the number of luxury homes entering the market to either increase or remain stable this year. Out of the 14 analysts polled, 12 held this view, while two predicted a decline. Demand expectations were also mixed: ten analysts said it would either rise or remain unchanged, while four believed it could fall.
Rising Rents and Socioeconomic Implications
Avneesh Sood, director at Delhi-based Eros Group, highlighted that property prices, especially in major cities, are escalating faster than incomes. He added that "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."
Urban rents are also projected to climb higher. According to poll medians, average rents in cities could increase by 6% to 8% over the coming year, at least twice the pace of the country's consumer inflation rate.
Some industry experts foresee even sharper increases. Square Yards' Sunita Mishra, Savills' Arvind Nandan, Colliers International's Ajay Sharma, and ANAROCK's Anuj Puri have projected rent growth ranging between 7% and 15%.
Conclusion: A Market at a Crossroads
The Indian housing market stands at a critical juncture, with premium segments driving growth while affordability concerns mount. As developers cater to affluent buyers, the gap between luxury and affordable housing widens, potentially reshaping urban living patterns and rental markets for years to come.
