Mid-Segment to Drive Housing Growth in 2026

30 Dec 2025 CW Team

The report, 2025 Recap, 2026 Outlook: Residential Real Estate, highlights that while overall transaction volumes softened marginally in 2025, value growth remained strong, reflecting a maturing and increasingly discerning housing market.

Across India’s nine major residential markets, registered home sales declined by 5 per cent year-on-year in 2025. However, total transaction value rose by over 11 per cent, supported by a 22 per cent increase in average deal sizes. This trend points to sustained demand for higher-value homes, even as volumes stabilised.

Western India continued to dominate the market, accounting for over 80 per cent of total transaction value, driven by higher ticket sizes. Southern markets such as Bengaluru and Hyderabad maintained steady end-user demand, while the National Capital Region (NCR) witnessed a clear bifurcation—strong traction in affordable and mid-income housing, alongside selective demand in premium segments.

Commenting on the shift, Tanuj Shori, Founder and CEO, Square Yards, said, “The market is entering a more mature phase. While premium and luxury housing led value growth in 2025, rising prices are now prompting a more measured approach. Buyers are increasingly focused on value, liveability, and long-term affordability.”

The report notes that sustained price appreciation over the past three to five years has started to test affordability in premium micro-markets. While demand remains resilient, the pace of growth in the luxury segment is expected to moderate in 2026, signalling a transition from rapid expansion to consolidation.

Looking ahead, Square Yards expects the mid-segment—homes priced between Rs 80 lakh and Rs 1.5 crore—to drive incremental demand. Improved affordability, better product offerings, and expanding infrastructure in peripheral urban zones are likely to support this shift.

As the market moves into 2026, the sector is expected to be characterised by steady transaction volumes, more balanced price growth, and increased participation from end-users. The report concludes that India’s housing market is entering a more stable and sustainable phase, underpinned by disciplined supply, maturing buyer preferences, and a stronger focus on value-led development.

India’s residential real estate market is entering a phase of recalibration, with the mid-income housing segment expected to emerge as the key growth driver in 2026, according to a new report by proptech firm Square Yards.The report, 2025 Recap, 2026 Outlook: Residential Real Estate, highlights that while overall transaction volumes softened marginally in 2025, value growth remained strong, reflecting a maturing and increasingly discerning housing market.Across India’s nine major residential markets, registered home sales declined by 5 per cent year-on-year in 2025. However, total transaction value rose by over 11 per cent, supported by a 22 per cent increase in average deal sizes. This trend points to sustained demand for higher-value homes, even as volumes stabilised.Western India continued to dominate the market, accounting for over 80 per cent of total transaction value, driven by higher ticket sizes. Southern markets such as Bengaluru and Hyderabad maintained steady end-user demand, while the National Capital Region (NCR) witnessed a clear bifurcation—strong traction in affordable and mid-income housing, alongside selective demand in premium segments.Commenting on the shift, Tanuj Shori, Founder and CEO, Square Yards, said, “The market is entering a more mature phase. While premium and luxury housing led value growth in 2025, rising prices are now prompting a more measured approach. Buyers are increasingly focused on value, liveability, and long-term affordability.”The report notes that sustained price appreciation over the past three to five years has started to test affordability in premium micro-markets. While demand remains resilient, the pace of growth in the luxury segment is expected to moderate in 2026, signalling a transition from rapid expansion to consolidation.Looking ahead, Square Yards expects the mid-segment—homes priced between Rs 80 lakh and Rs 1.5 crore—to drive incremental demand. Improved affordability, better product offerings, and expanding infrastructure in peripheral urban zones are likely to support this shift.As the market moves into 2026, the sector is expected to be characterised by steady transaction volumes, more balanced price growth, and increased participation from end-users. The report concludes that India’s housing market is entering a more stable and sustainable phase, underpinned by disciplined supply, maturing buyer preferences, and a stronger focus on value-led development.

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