Future of Luxury Real Estate in India: What’s Next for 2025

By Angad Bedi, CMD, BCD Group

Luxury has shed its opulent veneers and hollow grandeur. The era of flashy chandeliers and gold-plated accessories has given way to a new concept of high-end living that is about sustainability, smart technology and intensely personal experiences.

The luxury real estate market isn’t just keeping up with these transformations but leading the charge in shaping the dreams of a new generation of homebuyers who want more than just a status symbol. They want homes that reflect their values, fit their lifestyles and feel like a sanctuary in a fast-moving world.

The luxury housing sector continued its strong performance in Q1 2025 with sales of over INR 4 crore luxury homes rising by nearly 28 per cent YoY in the top seven cities. About 1,930 luxury units were sold in Q1 2025 compared to 1,510 units in Q1 2024. Several trends are transforming the luxury real estate sector in 2025 and making it an appealing wager for property buyers and residential property investors.

Rising Demand for High-End Living

India’s premium housing segment, i.e., houses priced above INR 4 crore, has been recording historic growth. Luxury home sales in the seven largest cities, including Bengaluru, rose by 53 per cent in 2024, reaching 19,700 units, according to CBRE India, up from 12,900 in 2023.

Such demand represents the growing demographic of ultra-high-net-worth individuals and high-net-worth individuals estimated to grow by 63 per cent between 2020 and 2025, according to experts.

These buyers desire more than just size and flashy aesthetics. They want houses they can call their own, complete with private gardens for relaxation, home theatres for Friday movie nights and a special area for morning yoga.

According to India Sotheby’s International Realty, 60 per cent of luxury buyers in 2024 prioritised these kinds of personalised features. Developers are listening and rolling out bespoke amenities like climate-controlled wine cellars, private art galleries or high-tech gyms tailored to individual passions.

Sustainability-The Soul of Modern Luxury

Sustainability is no longer a buzzword but a necessity. More than 50 per cent of new luxury projects in India today include green elements, ranging from energy-efficient design to solar panels and rainwater harvesting systems, says CBRE India. New-age buyers are increasingly turning to green luxury homes seamlessly integrated with nature, not just to reduce their carbon footprint, but also to enjoy a peaceful and healthy lifestyle.

Thus, a majority of luxury projects are embracing biophilic design by incorporating features like green courtyards, indoor gardens and water elements that bridge the gap between indoor and outdoor spaces. These designs not only appear stunning but also boost health and can raise property values significantly.

In cities such as Bengaluru, where pollution and urban stress are genuine issues, developers are embracing low-density layouts and lush landscapes. The trend of spacious, green-dotted gated communities offering serene retreats is particularly relevant ad towns and cities anticipate over 600 million residents by 2036.

Smart Homes, Smarter Living

Technology is a game-changer too. Households are increasingly integrating smart solutions driven by the growth of hybrid work and the Internet of things.  Smart home systems have become the norm in high-end developments since they allow residents to control temperature and ensure security with a touch of their phone.

Developers are also catering to security-conscious buyers with advanced surveillance and biometric access systems. These amenities aren’t just convenient but a selling point for non-resident Indians (NRIs), who will account for 20 per cent of all realty investments in India by 2025. For NRIs, luxury homes in cities, such as Bengaluru, are an investment and a means of retaining their roots.

Infrastructure development is also contributing big time. New metro lines, improved roads and smart city initiatives are making prime locations even more sought after. In north Bengaluru, for instance, metro expansions are driving the demand for high-end residences in surrounding areas. Even Tier 2 cities are joining the fray to provide affordability and sleek amenities that attract investors seeking high returns.

Opportunities and Challenges for Investors

For investors, India’s luxury real estate is a goldmine. Residential properties in the INR 1.5-INR 5 crore segment are witnessing an increase in demand in 2024 driven by increasing affluence and NRI interest. High-end locations with premium amenities hold the promise of not only capital appreciation but also guaranteed rental returns from high-end lessees.

However, things are not entirely smooth sailing as regulatory issues, exorbitant maintenance costs and global economic uncertainty often come in the way. Even with RERA’s improved transparency, approval delays and land acquisition hurdles still persist. Therefore, investors need to verify title deeds and get legal advice to avoid blunders.

The Road Ahead

The luxury real estate sector is thriving, and 2025 is proving to be a turning point. Guided by innovation, ranging from advanced technology, green architecture or ultra-personalised service, the sector is redefining premium living. As cities grow and homeownership dreams get bigger, demand for ultra-luxury properties in both metropolitan cities and scenic localities will drive prices to record highs, making them a prime investment asset. Whether it’s a sleek penthouse in Bengaluru, an eco-friendly villa or a smart home in a rising Tier  2 city, the future of luxury living is full of exciting options.