Sales volumes dip, values rise — signalling a decisive shift in buyer demand
After years of post-pandemic exuberance driven by premium and luxury housing, India’s residential real estate market is entering a turning point. A new report by real estate platform Square Yards indicates that the mid-segment housing market is set to become the primary growth engine in 2026, as the premium cycle begins to peak in key urban markets.
The report, “2025 Recap, 2026 Outlook: Residential Real Estate”, highlights a market that is no longer expanding on volumes alone but is transitioning towards value-led, end-user-driven growth.
Big Shift in 2025: Fewer Homes Sold, But at Much Higher Value
The most striking takeaway from 2025 data is the disconnect between transaction volumes and sales value.
In India’s nine major residential markets:
- Residential transactions fell by 5% year-on-year
- Total residential sales value rose by over 11%
- Average deal size jumped by 22%
👉 This indicates that while fewer homes changed hands, buyers were purchasing larger, more expensive units, largely in the premium and luxury segments.
Premium Housing Shows Early Signs of Saturation
According to Square Yards, 2025 may mark the high point of the premium and luxury housing cycle, especially in mature markets.
- Sustained price appreciation over the last 3–5 years has begun to stretch affordability
- Incremental growth in luxury housing is expected to moderate in 2026
- The shift is seen as stabilisation, not a slowdown
“This divergence reflects a maturing market, where growth is increasingly demand-driven rather than volume-led,” said Tanuj Shori, Founder & CEO, Square Yards, noting that premium housing dominated value contribution in markets like Mumbai Metropolitan Region (MMR).
Regional Trends: West Leads Value, South Holds End-User Strength
The report points to clear regional divergence in buyer behaviour:
- Western India accounted for over 80% of total registered sales value in 2025, driven by higher ticket sizes
- Southern markets like Bengaluru and Hyderabad continued to show strong end-user participation
- NCR markets displayed sharp price segmentation:
- Affordable and mid-market homes drove volumes
- Premium demand remained selective and location-specific
This points to a more informed, segmented, and mature buyer base.
Why the Mid-Segment Will Dominate 2026
The report identifies the mid-segment (homes priced between ₹80 lakh and ₹1.5 crore) as the biggest beneficiary of the next market cycle.
Key reasons:
- Housing inflation is moderating in several saturated premium markets
- Price growth is stabilising, improving affordability for mid-income buyers
- Infrastructure expansion is opening up peripheral urban corridors
- Buyers are prioritising value, livability, and long-term usability over status-driven purchases
As premium markets stabilise, incremental demand is expected to shift decisively towards the mid-segment.
Property Prices: Post-Covid Surge Now Normalising
While property prices have risen sharply since 2019 across cities, 2025 shows uneven momentum:
- Strong YoY price growth in markets like Pune, MMR, Chennai, and Noida-Greater Noida
- Slower growth in Ahmedabad, Hyderabad, and Kolkata
- The post-Covid price boom is giving way to more measured appreciation
This normalisation further supports mid-market affordability.
Supply Responds to Demand, But Cautiously
Developers appear optimistic but disciplined:
- New residential launches rose 18% in 2025
- Supply growth remains controlled, avoiding oversupply risks
- Focus is shifting to mid-income and end-user-friendly projects
Execution quality and location selection will be critical for success in the next phase.
2026 Outlook: From Expansion to Equilibrium
According to the report, India’s housing market is moving into a balanced phase:
- Transaction volumes likely to remain stable
- Average ticket sizes to stay elevated
- Price growth expected to be more evenly distributed
- Growth driven by real demand, not speculation
Overall, the sector appears positioned for sustainable, broad-based progress, anchored by the mid-segment rather than luxury exuberance.
Also Read: Affordable Homes Selling Faster, Luxury Homes Slowing Down
