Is the Middle Class Opting for Premium Homes Over Affordable Ones in India?
The latest ANAROCK Homebuyer Sentiment Survey (H1 2025) reveals a significant shift in India’s housing market, with 36% of buyers now preferring premium homes priced between Rs 90 lakh and Rs 1.5 crore, while only 17% opt for affordable housing under Rs 45 lakh.
Indian Housing MarketAffordable HousingPremium HomesAnarockMiddle ClassReal Estate NewsSep 10, 2025
In contrast, affordable housing (under Rs 45 lakh) has fallen to a mere 17% share, down from 40% in 2019. According to the survey, 62% of affordable homebuyers are dissatisfied with current offerings, citing poor project locations, small unit sizes, and low construction quality.
A staggering 92% complained about accessibility issues, including poor connectivity to healthcare, schools, and workplaces. “Affordable housing is no longer synonymous with value if buyers feel compromised on quality and convenience,” said Anuj Puri, Chairman, ANAROCK Group.
The middle-class dream has clearly evolved. Rather than settling for budget options, buyers are increasingly stretching finances to access better-located, larger, and well-designed homes. This is reflected in the rising demand for 3BHK units, which dominate preferences in Delhi-NCR, Hyderabad, and Bengaluru. “Homebuyers are willing to pay a premium if it guarantees quality and timely delivery,” noted Puri.
With affordable housing demand shrinking, developers have reoriented supply. The share of new launches in the budget segment dropped from 18% in H1 2023 to just 12% in H1 2025, ANAROCK data shows. Instead, premium and mid-segment launches dominate, especially in metropolitan markets where rising disposable incomes support aspirational buying.
The survey underlines how India’s housing market is undergoing “premiumization,” as aspirations rise faster than affordability challenges can be solved. While developers are keen to chase this segment, policymakers may need to rethink affordable housing strategies to ensure inclusivity. For now, the Indian middle class appears set on trading affordability for aspiration.
Frequently Asked Questions
What is the main finding of ANAROCK's Homebuyer Sentiment Survey (H1 2025)?
The main finding is that 36% of buyers now prefer premium homes priced between Rs 90 lakh and Rs 1.5 crore, while only 17% opt for affordable housing under Rs 45 lakh.
Why are affordable homes losing popularity among buyers?
Affordable homes are losing popularity due to poor project locations, small unit sizes, low construction quality, and poor connectivity to essential services like healthcare, schools, and workplaces.
What are the preferences of middle-class homebuyers in metropolitan markets?
Middle-class homebuyers in metropolitan markets prefer larger, better-located, and well-designed homes, especially 3BHK units, which dominate preferences in cities like Delhi-NCR, Hyderabad, and Bengaluru.
How have developers responded to the shift in buyer preferences?
Developers have reoriented their supply by reducing the share of new launches in the budget segment from 18% in H1 2023 to just 12% in H1 2025, focusing more on premium and mid-segment launches.
What does the term 'premiumization' refer to in the context of India's housing market?
Premiumization refers to the trend where the housing market is shifting towards higher-priced, better-located, and better-designed homes, as aspirations rise faster than affordability challenges can be addressed.
Related News Articles
Unlocking Opportunities in Tampa Bay's Thriving Commercial Real Estate Market
Discover why Tampa Bay is a hotspot for commercial real estate investing, with its diverse economy, favorable climate, and growing population. From emerging trends to top investment hotspots, explore the opportunities in this dynamic region.
Low Mutual Fund Investments in REITs and InvITs: A Closer Look
Mutual fund managers are wary of aggressively investing in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) due to various market uncertainties and regulatory concerns.
CREDAI Maharashtra Installation Ceremony Marks a New Era for Real Estate in Pune
The CREDAI Maharashtra installation ceremony, inaugurated by Deputy CM Ajit Pawar, emphasizes the importance of overcoming regulatory hurdles to boost the real estate sector in Pune.
Godrej Properties Reports 19% Decline in Q4 Net Profit, Projects Steady FY26 Growth
Godrej Properties, a leading real estate developer in India, has reported a 19% decline in its net profit for the fourth quarter of the fiscal year. Despite the setback, the company remains optimistic about its business development for FY26, with plans to launch multiple projects across key cities.
Dholera's Rise: The Next Real Estate Frontier in Gujarat
Dholera Special Investment Region (SIR) in Gujarat, India, is witnessing a significant surge in land prices, driven by major infrastructure projects and increased investor interest.
Lucknow to Transform with Two Mega Infrastructure Projects
The Lucknow Development Authority (LDA) has unveiled plans for two major infrastructure projects: a 4,000-unit river view residential complex and a mixed-use hotel-commercial complex. These projects, valued at ₹3,300 crore, aim to enhance the city's urban landscape and boost economic activity.