India’s Home Prices to Rise 6 Percent Over Two Years as Luxury Momentum Slows

India’s housing market is poised for moderate but steady appreciation, with analysts projecting home prices to rise by roughly six percent over the next two years. The latest insights come from a Reuters poll of 15 real estate experts, reflecting both strong economic fundamentals and widening concerns about affordability in key metropolitan regions.

The luxury housing segment, which has been the primary engine of growth since the post-pandemic rebound, is now showing signs of reaching its peak. Analysts say cities like Delhi NCR, Mumbai and Bengaluru, which have led the surge in upscale home sales, are likely to witness a gradual easing of momentum over the coming years. High-net-worth individuals, Non-Resident Indians and investment-driven buyers helped fuel premium launches in recent years, but rising land prices and higher development costs are expected to temper sentiment.

Developers have reported impressive financial results, with revenues rising nearly fourteen percent in the July to September quarter despite a nine percent decline in total home sales across the top seven cities. This divergence highlights an unmistakable shift toward high-value inventory, driven by demand for larger, amenity-rich homes in prime locations.

However, this luxury-heavy market trajectory has intensified India’s long-standing affordable housing crisis. New supply in the budget segment remains limited, even as urban demand continues to climb. According to Knight Frank, India faces a shortage of nearly ten million affordable homes, a deficit projected to triple by 2030 if corrective steps are not taken. Rising land acquisition costs and elevated construction expenses have made affordable projects increasingly difficult for developers to execute.

The Reserve Bank of India’s interest rate cuts have provided marginal relief to first-time buyers, but analysts believe further easing is unlikely as the central bank nears the end of its rate-reduction cycle. With financial markets performing strongly, investment-led luxury demand may continue for a short period, though experts widely agree the segment’s dominance will eventually fade.

As India’s economy expands, the contrasting trajectories of luxury demand and affordable supply will shape the real estate sector’s stability and inclusiveness in the years to come.