Premium homes gain bigger share of India’s new housing supply

India’s housing market is witnessing a sharp shift towards premium and luxury homes, with their share of new launches rising significantly since 2022. Meanwhile, affordable housing’s share has fallen, while strong collections and deleveraging have strengthened developers’ balance sheets

Mumbai: India’s new housing supply has shifted sharply towards premium homes in recent years, outpacing affordable housing, a report showed on Wednesday.

In Q1 2022, homes priced below Rs 1.5 crore accounted for 85 per cent of new launches across the top seven cities. By Q1 2025, this had fallen to 57 per cent, and by Q1 2026, it stood at just 47 per cent.

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Over the same period, the Rs 1.5–Rs 4 crore segment grew from a 14 per cent share to 34 per cent and then 44 per cent, while homes priced above Rs 4 crore rose from just 1 per cent to 9 per cent of new launches, according to the report by CareEdge Ratings.

Indian residential developers are better positioned to navigate ongoing geopolitical uncertainty, as healthy collections, fundraising-led deleveraging, and greater financial discipline have strengthened their balance sheets, the report mentioned.

The debt-to-collections ratio has declined sharply from 1.80 times in FY20 to 0.68 times in FY26, reflecting sustained deleveraging across leading market players.

While debt levels remained broadly range-bound during this period, healthy collections from sizeable launches rose to over Rs 90,000 crore, with bookings exceeding Rs 1.5 lakh crore in FY26.

“This shift reflects developers’ increasing focus on mid-premium and luxury housing, driven by customer preferences and rising land acquisition, construction and compliance costs that have impacted the viability of affordable housing projects,” said Rajashree Murkute, Senior Director, CareEdge Ratings.

At the same time, sustained demand from affluent domestic buyers and NRIs, coupled with a preference for larger homes with premium amenities, has encouraged developers to allocate a greater share of new supply toward the luxury/ultra-luxury segments, said Murkute.

Housing sales trends remained divergent across the top eight cities in Q1 2026. Sales declined by 11 per cent in Pune and Delhi-NCR and by 7 per cent in Mumbai Metropolitan Region (MMR), reflecting affordability pressures after sustained price appreciation, normalisation after a strong multi-year upcycle, and cautious buyer sentiment amid geopolitical and financial-market uncertainty.

In contrast, southern markets remained comparatively resilient, with sales increasing by 9 per cent in Chennai, 5 per cent in Bengaluru and 1 per cent in Hyderabad, supported by steady end-user demand, employment-linked housing requirements and new project activity.