From Affordable to Premium: Shift in India’s Residential Real Estate Market

November 30, 2024: With an 18% share in national employment, real estate is the largest employment generator after agriculture. The Indian real estate sector, currently valued at $493 billion, contributes 7.3% to India’s GDP. Various factors contribute to its growth, including rising urbanisation, increasing disposable incomes, and heightened demand for residential spaces.

The residential market has seen an upsurge over the years as buyers’ preferences and lifestyles have evolved. A Knight Frank’s research reveals that 80% of respondents to a survey of 1,629 home buyers across India’s Tier-I cities favour home ownership. The trend for homebuying varies, with 37% seeking upgrades, 32% being first-time buyers, and 25% investing in property. Catering to these demands, developers increasingly focus on premium properties, especially in urban areas, to meet rising consumer expectations for homes with modern amenities, spacious layouts, and high-end features.

Yash Miglani, MD, Migsun Group says, “The sector is witnessing a massive shift toward premium residential properties, driven by discerning buyers who value quality living spaces. Today’s urban buyers seek amenities like enhanced security, recreational areas, and sustainable designs. This shift reflects a lifestyle evolution among Indian homeowners who view real estate as a long-term investment in quality of life. In cities like Goa, where developments are adapting to these demands, we look forward to offering homes that meet both aesthetic and functional needs.”

Saurab Saharan, Group Managing Director, HCBS Developments, said, “While the luxury market grows exponentially in Delhi-NCR, buyers now look for sustainable residential projects with green spaces and energy-efficient systems. With Gurgaon’s rapid urbanization, residential developments are transforming to offer a mix of sophistication and sustainability. As developers, we respond to this by crafting premium projects incorporating green building practices, energy efficiency, and wellness-focused amenities.”

Manit Sethi, Director, Excentia Infra says, “With the developing infrastructure and connectivity, the city’s residential sector caters to families looking for larger homes strategically located and equipped with high-quality amenities at competitive prices. Smart homes are trendy, as buyers prefer automated solutions that enhance convenience. As the demand for high-end homes increases, we anticipate bringing more luxury projects that match modern homebuyers’ desires.”

Further, the rising investments from REITs and private equity are reshaping residential real estate, strengthening market confidence in premium properties. This influx of institutional capital strengthens the high-value segment, signaling long-term growth and appealing to investors and homebuyers.

Thus, India’s residential real estate sector is shifting from affordable to premium housing, driven by evolving buyer expectations, urbanization, and an increased emphasis on lifestyle quality. Developers cater to this demand by delivering luxury projects with enhanced amenities, sustainable features, and modern technology, particularly in metropolitan hubs like Delhi-NCR.