Home prices up 23%, land deals up 65%

Amid escalating demand for luxury homes after the pandemic, there have been record new launches and sales of costlier homes across the top 7 cities. The average home price in India's top 7 cities, including Bengaluru, Hyderabad, Chennai, Pune, Kolkata, NCR, and MMR, stood at ₹1.23 crore in H1 FY25 alone, an increase of 23% in a year. Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, says a sustained momentum in residential land transactions and high-profile deals reflects strong investor confidence, favourable economic conditions, and India’s evolving real estate landscape.

"India’s land deal volume surged by 65% year-on-year till August, reaching around 1,700 acres. This growth was primarily driven by six major cities — Delhi-NCR, Mumbai, Chennai, Hyderabad, Bengaluru, and Pune. During this period, over 100 land transactions were recorded, marking a significant increase from the 60+ deals in the corresponding period of the previous year. "Delhi-NCR led the market with a 32% share of total land deal activity. Within the region, Gurgaon accounted for the largest share at ~65%, followed by Noida/Greater Noida at ~20%. Bengaluru, Mumbai, and Chennai followed with shares of 22%, 12%, and 10%, respectively. Collectively, these four cities accounted for ~75% of the total land deal volume."

Rise in luxury housing and India's wealthy

Demand for luxury and ultra-luxury homes has been scaling ever-rising heights since the pandemic, thanks to a spike in the number of India's wealthy in the recent past. With demand soaring, developers have gone on a veritable launch spree for such high-priced homes. In 2022, 2023 and 2024 till August, over 99 ultra-luxury residential deals worth around ₹8,069 crore were closed in the top cities, as per ANAROCK data.

India ranks 6th globally in ultra-high net worth individuals (UHNI) population and third in Asia, trailing only China and Japan. The country's UHNI count reached 13,600 in 2024, marking a 6% annual growth. This population is projected to soar by 50% by 2028, far outpacing the global growth average of 30%. India is home to over 850,000 high-net-worth individuals (HNIs), and this is projected to double to 1.65 million by 2027. Interestingly, 20% of these millionaires are under 40, signalling the growing influence of young wealth creators.

"India is witnessing a transformative era of wealth creation. From bustling metros to emerging Tier-II cities, the nation’s affluent population is expanding at a pace that is capturing global attention. A dynamic mix of young entrepreneurs, tech pioneers, and seasoned industrialists drives this change. The rise of high-net-worth individuals (HNIs, or people with investable assets of at least $1 million) and ultra-high-net-worth individuals (UHNIs, or those with assets worth above $30 million) in 2024 paints a fascinating picture of opportunity, influence, and ambition," says Prashant Thakur, Regional Director & Head – Research, ANAROCK Group.

Outlook 2025

India’s real estate sector is poised to expand to $5.8 trillion by 2047, by when India aims to become a developed economy. If that happens, real estate's contribution to GDP will expand to 15.5% from 7.3%. The premium and luxury housing segment will play a pivotal role in this expansion. In 2024, this segment saw its collective share of the overall residential demand increase from 6% in 2019 to 16% in the first nine months of 2024. "As luxury housing shifts gears from traditional bungalows to apartments and penthouses, we anticipate the premiumisation of amenities (in contrast to providing additional amenities) to be a key differentiator for luxury projects," says Anshuman Magazine of CBRE.

With 2025 around the corner, demand for luxury and ultra-luxury segments within residential real estate will likely see higher growth compared to affordable and middle-income segments. "2025 is likely to witness healthy traction in luxury and ultra-luxury segments, driven by strong appetite from HNIs and NRIs. A clear preference for premium and best-in-class offerings will increasingly define the contours of the segment. Enquiries and primary sales in plotted developments, villas within gated communities and vacation homes are likely to be strong throughout 2025 and beyond," says Badal Yagnik, CEO, real estate advisory firm Colliers India.

While it's clear that India's wealthy are driving the demand, one of the reasons behind increased prices across key cities, there are concerns that India's middle class, which constitutes 31% of the Indian population, may be cutting back on spending in the wake of high inflation. Despite that, some of the stakeholders remain positive that 2025 will see a continued momentum towards premiumisation for long-term returns. "While the residential real estate sector continues to show robust performance in the existing interest rate environment, we hope to see lower interest rates next year, which will provide further impetus to real estate and other sectors. The sustained demand will solidify the sector’s upward trajectory well into 2025, cementing the Indian real estate market as a key driver of economic growth," says Ramani Sastri, Chairman and MD of luxury property company Sterling Developers.

Housing sector outlook 2025

Outlook 2025: Luxury real estate — Record deals, rising demand, resilient forecast