India's Real Estate Sector Faces Premiumization Amid Affordability Challenges

The Indian real estate sector is in the throes of premiumization, but affordability is emerging as a major concern, as highlighted in a recent report by Nuvama. While the demand for premium and luxury homes is on the rise, this trend has yet to significantly boost overall housing volumes. Instead, the value of sales has surged ahead, outstripping the increase in the number of houses sold.

In a telling statistic, the report noted that in June 2025, the sales volume across India's top seven cities rose by a mere 1% year-on-year, whereas the sales value experienced a robust 23% year-on-year increase. This shift towards higher-priced properties signifies a trend where buyers are gravitating toward more expensive homes, even as the quantity of sales stagnates.

The report further underscores that while the premiumization trend is reshaping the industry, with sales value rising 9% year-on-year in the second quarter of 2025 (Q2CY25), there was a 4% quarter-on-quarter decline. The National Capital Region led with a 58% year-on-year rise in sales value, but cities like Pune and the Mumbai Metropolitan Region recorded declines in housing absorption, highlighting regional disparities in market performance.

(With inputs from agencies.)