Housing costs in the country are likely to get costlier over the next few years, with average prices expected to increase by about 5% annually until 2028. The projections come as developers are turning towards premium housing projects, driven by strong demand from wealthy buyers, according to a Reuters poll of property analysts.
The latest survey results differ slightly from the previous poll conducted in December, which had projected price growth of 6% for 2026 and 5% for 2027. Despite the revised outlook, the expected increase remains higher than the 3.6% rise recorded in 2025, according to Reuters calculations based on the Reserve Bank of India’s House Price Index.
Analysts noted that the property market’s momentum has largely been supported by affluent buyers, who represent a relatively small share of the population.
With this segment showing a stronger capacity to handle rising costs, developers have had little incentive to focus on building 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,” said Vivek Rathi, national director of research at Knight Frank.
Premium housing is generally 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 price category accounted for 63% of all residential sales, up from 53% in the previous year. This rise in the share of premium housing occurred even as total residential sales dropped by 11%.
Meanwhile, the market for homes priced below 10 million rupees has weakened significantly. Demand for properties in this segment declined by 31%, according to a report by JLL.
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 expected to increase between 5% and 7% over the next three years.
Regarding supply trends, most analysts expect 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.
Avneesh Sood, director at Delhi-based Eros Group, said property prices, particularly in major cities, were rising 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 expected to move 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 expect 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%.
Source: The Times Of India
