India home prices likely to rise about 5% annually through 2028, poll shows

India’s housing market is expected to see home prices rise steadily over the next three years as developers focus increasingly on premium projects, according to a Reuters poll of property analysts.

Average home prices in India are expected to climb about 5 per cent each year through 2028, the poll showed, as the market continues to be driven largely by demand from wealthy buyers.

The estimates compare with gains of 6 per cent for 2026 and 5 per cent for 2027 predicted in the previous Reuters poll conducted in December.

The forecast is also higher than a 3.6 per cent increase in 2025, according to Reuters calculations based on the Reserve Bank of India’s House Price Index.

Demand in India’s housing market has been led largely by affluent buyers, a relatively small segment of the population, with developers showing limited incentive to build homes for younger first-time buyers in the affordable category.

“It makes more economic sense for the developer to focus on premium housing … because the ability of customers in the premium housing segment is much higher to absorb the price shock,” said Vivek Rathi, national director of research at Knight Frank.

Most analysts classify premium housing as homes priced above 10 million rupees, nearly 40 times India’s average national per capita income.

Homes in that category accounted for 63 per cent of total housing sales in 2025, up from 53 per cent a year earlier, even though overall residential sales declined by 11 per cent.

At the same time, demand for homes priced below 10 million rupees fell sharply. According to a report by JLL, demand in that segment dropped 31 per cent.

The Reuters survey, conducted between February 23 and March 10, indicated that home prices in major urban centres — including Mumbai, Delhi, the National Capital Region, Bengaluru and Chennai — are expected to increase between 5 per cent and 7 per cent over the next three years.

Supply in the luxury housing segment is also expected to remain strong. Twelve of the fourteen analysts polled said the supply of luxury homes would either rise or remain unchanged this year, while two predicted a decline.

Demand is also expected to hold steady. Ten analysts said demand would either increase or remain unchanged, while four expected it to fall.

Avneesh Sood, director at Delhi-based Eros Group, said the pace of price increases was outstripping income growth in major cities.

He added that “middle- and lower-income demographics are being marginalised into a rental trap, forcing a larger proportion of the population to remain in the rental pool for much longer periods.”

The poll’s median estimates also showed that average urban rents are expected to increase between 6 per cent and 8 per cent over the coming year, which is at least twice the country’s consumer inflation rate.

Some analysts expect an even steeper rise in rents. Sunita Mishra of Square Yards, Arvind Nandan of Savills, Ajay Sharma of Colliers International and Anuj Puri of ANAROCK expect rents to increase between 7 per cent and 15 per cent.

(With inputs from Reuters)