Housing Sales to See Steady Growth: Luxury Segment to Dominate New Launches
Residential real estate developers are expected to see stable sales growth in the coming years, with the luxury segment dominating new launches. According to Crisil, sales volumes are projected to grow by 5-7%, while average prices are likely to rise by 4-6%.
Real EstateLuxury HousingAffordable HousingSales GrowthPremiumisationReal Estate NewsJul 02, 2025
The trend of premiumisation is expected to continue, with the luxury segment accounting for nearly 40% of total launches in calendar years 2025 and 2026. As growth in this segment stabilizes, price appreciation is also expected to moderate, with average prices projected to grow steadily at 4–6% over the medium term following the double-digit increases recorded in the past two fiscals.
In contrast, the affordable and mid-income segments are likely to see a much smaller share of new launches, 10–12% and 19–20%, respectively, during the same period. This marks a sharp decline from their 2020 levels, when they accounted for 30% and 40% of launches, respectively. Crisil attributes this drop to rising land and construction costs, which have made these segments less viable for developers.
While supply is expected to continue outpacing demand, leading to a marginal rise in inventory levels this fiscal and the next, developers are likely to maintain healthy credit profiles. Strong collections and deleveraged balance sheets are expected to support financial stability across the sector.
Crisil has analysed 75 real estate companies, accounting for around 35 per cent of the residential sales in the country. The premium and luxury segments in the top seven cities have witnessed a significant surge, with their share of launches increasing from 9% in calendar year 2020 to 37% in 2024. This can be attributed to rising incomes and urbanisation, which have fuelled the desire for larger, more luxurious living spaces.
As the trend of premiumisation continues, the premium and luxury segments are expected to account for 38-40% of total launches in calendar years 2025 and 2026. With the growth in these segments normalizing, the average price is anticipated to grow at a steady rate of 4-6% over the medium term, following the double-digit growth seen in the previous two fiscals.
Frequently Asked Questions
What is the projected growth in sales volumes for the residential real estate sector?
According to Crisil, sales volumes in the residential real estate sector are projected to grow by 5-7% this fiscal and the next.
What percentage of new launches is expected to be in the luxury segment in 2025-26?
The luxury segment is expected to account for nearly 40% of total new launches in calendar years 2025 and 2026.
Why are the affordable and mid-income segments seeing a decline in new launches?
The decline in new launches in the affordable and mid-income segments is attributed to rising land and construction costs, which have made these segments less viable for developers.
How is the trend of premiumisation affecting the real estate market?
The trend of premiumisation is leading to a significant increase in the share of luxury and premium housing launches, driven by rising incomes and urbanisation.
What is the expected growth rate in average prices for the luxury and premium segments?
The average price for the luxury and premium segments is expected to grow at a steady rate of 4-6% over the medium term, following the double-digit growth seen in the previous two fiscals.
Related News Articles
Indian Real Estate Sees Surge in Joint Development Agreements
Joint development agreements for 1546 acres of land inked in the last 18 months, with a focus on residential projects in Delhi NCR, Bengaluru, and Mumbai.
MahaRERA's New Guidelines: Enhanced Protection for Homebuyers in Maharashtra
From July 1, developers in Maharashtra will be required to maintain designated bank accounts to ensure transparency and accountability in financial operations of housing projects.
Arnya RealEstates Marks First Close of ₹375 Crore for Maiden Fund
Arnya RealEstates Fund Advisors raises ₹375 crore for its maiden real estate fund, with a focus on providing early-stage growth capital to residential projects.
Maharashtra Elections 2024: Nawab Malik Files Nomination from Mankhurd-Shivaji Nagar
Today marks the final day for candidates to submit their nominations for the Maharashtra state elections. Notable political figure Nawab Malik is set to file his nomination from the Mankhurd-Shivaji Nagar constituency.
Bombay High Court Stays REAT Order on Rs. 38.18 Cr Deposit in Real Estate Dispute
In a significant development, Justice Gauri Godse of the Bombay High Court has stayed an order by the Real Estate Appellate Tribunal (REAT) that directed a developer to deposit Rs. 38.18 crore in a real estate dispute.
India's Office Space Market Surges to 515 Lakh Sq Ft in 2024, Setting New Records
Mumbai leads the growth in new completions by 170%, while the IT-ITeS sector drives leasing activity. With demand soaring, 2025 is poised to be another year of robust growth in India's commercial real estate.