Mumbai: India’s housing supply has shifted sharply towards premium homes and away from affordable housing in recent years, according to a report released on Wednesday.
The report said that in Q1 2022, 85% of newly launched homes across the top seven cities were priced below Rs 1.5 crore. However, this share subsequently declined to 55%, highlighting a significant change in the composition of new residential supply.
According to CareEdge Ratings, the share of homes priced between Rs 1.5 crore and Rs 4 crore rose from 14% to 34% over the same period, before increasing further to 44%.
The report also said Indian residential developers are now better positioned to navigate ongoing geopolitical uncertainty, supported by stronger balance sheets, healthy collections, fundraising-led deleveraging and greater financial discipline.
The debt-to-collections ratio declined sharply from 1.80 times in FY20 to 0.68 times in FY26, reflecting sustained deleveraging among key market players.
Collections from sizeable launches rose to more than Rs 90,000 crore, while bookings exceeded Rs 1.5 lakh crore in FY26, even as debt levels remained broadly range-bound during the period.
“This shift reflects developers' increasing focus on mid-premium and luxury housing, driven by customer preferences and rising land acquisition, construction and compliance costs that have impacted the viability of affordable housing projects,” said Rajashree Murkute, Senior Director at CareEdge Ratings.
Murkute added that sustained demand from affluent domestic buyers and NRIs, coupled with a preference for larger homes and premium amenities, has encouraged developers to allocate a greater share of new supply towards luxury and ultra-luxury housing.
In Q1 2026, housing sales trends remained divergent across the top eight cities. Pune and Delhi-NCR recorded declines of 11% each, while the Mumbai Metropolitan Region (MMR) saw sales fall 7%.
The declines were attributed to affordability pressures following sustained price appreciation, normalisation after a strong multi-year upcycle and cautious buyer sentiment amid geopolitical and financial-market uncertainty.
Southern markets, however, recorded a comparatively stronger performance. Housing sales increased 9% in Chennai, 5% in Bengaluru and 1% in Hyderabad.
The growth was supported by steady end-user demand, employment-linked housing requirements and continued new project activity.
