Developers Focus on Larger Homes While Buyers Continue to Prefer Affordable Properties Below ₹75 Lakh in Key Growth Cities

India's residential real estate market is witnessing a significant shift in both supply and demand dynamics. While developers are increasingly launching larger, premium homes to cater to changing lifestyle preferences, affordability continues to dominate buying decisions across several major cities. The latest market trends indicate that India's housing sector is now being driven by two parallel themes—rising demand for spacious, premium residences among higher-income households and sustained interest in budget-friendly homes among first-time buyers.

According to the latest Magicbricks PropIndex (April–June 2026), 46% of the active residential inventory across India now consists of 3 BHK homes, reflecting developers' confidence in long-term demand for larger living spaces. However, buyer demand continues to remain strongest for 2 BHK homes, demonstrating that affordability remains the biggest factor influencing purchasing decisions.

The evolving landscape highlights the increasing diversity of India's housing market, where regional economic growth, infrastructure development and changing consumer lifestyles are creating distinct demand patterns.

Developers Increase Supply of Larger Homes

Residential developers have significantly expanded the availability of larger apartments over the past few years.

The report shows that 3 BHK units account for nearly half of all available housing inventory, compared with 32% for 2 BHK homes, indicating a clear shift towards premium residential developments.

Current Housing Supply Mix

Developers believe larger homes will continue attracting buyers looking for upgraded lifestyles, especially in metropolitan cities where higher disposable incomes and changing work patterns are reshaping housing preferences.

Post-Pandemic Lifestyle Changes Continue to Influence Demand

The growing popularity of larger homes is closely linked to changing lifestyle requirements that emerged after the pandemic.

Modern homebuyers increasingly seek additional space for:

• Dedicated home offices.

• Children's study rooms.

• Multi-generational family living.

• Fitness and wellness areas.

• Better privacy.

• Flexible work-from-home arrangements.

The demand for larger residences has encouraged developers to design projects with spacious layouts, improved ventilation, larger balconies and integrated lifestyle amenities.

Affordability Still Remains the Biggest Buying Factor

Despite the rising supply of premium homes, affordability continues to shape actual purchase decisions.

According to the report:

Buyer Preference by Configuration

The figures suggest that while buyers aspire to own larger homes, financial considerations continue to influence final purchasing decisions.

For many middle-income families, 2 BHK apartments remain the ideal balance between affordability, functionality and long-term investment value.

Homes Below ₹75 Lakh Continue to Attract Maximum Demand

Affordable housing remains the backbone of India's residential market in several emerging urban centres.

Cities recording the strongest preference for homes priced below ₹75 lakh include:

• Ahmedabad

• Pune

• Kolkata

• Greater Noida

These markets continue attracting first-time buyers due to:

• Competitive property prices.

• Expanding employment opportunities.

• Improved metro and road connectivity.

• Better civic infrastructure.

• Growing industrial and IT activity.

The combination of affordability and infrastructure development has made these cities among the fastest-growing residential markets in the country.

Premium Housing Witnesses Rapid Expansion

At the same time, India's premium housing segment continues to expand steadily.

Demand for homes priced between ₹1.5 crore and ₹3 crore has strengthened significantly across:

• Bengaluru

• Hyderabad

• Gurugram

• Noida

Several structural factors are supporting this trend, including:

• Rising household incomes.

• Expansion of Global Capability Centres (GCCs).

• Growth in high-paying technology jobs.

• Better mortgage availability.

• Lifestyle upgrades.

• Preference for integrated townships.

Developers are increasingly targeting affluent homebuyers seeking larger apartments equipped with premium amenities and sustainable infrastructure.

Luxury Housing Remains Concentrated in Select Cities

While premium housing is becoming more widespread, India's ultra-luxury residential market remains concentrated in a few established locations.

Top Luxury Housing Markets

• Mumbai

• Gurugram

• New Delhi

These cities continue to attract demand from:

• High-net-worth individuals.

• Corporate leaders.

• Entrepreneurs.

• Non-Resident Indians (NRIs).

• Global investors.

Limited land availability and strong demand continue to support premium pricing in these markets.

Mid-Sized Homes Continue to Dominate Overall Demand

The report highlights that homes ranging between 750 square feet and 2,000 square feet account for nearly 70% of total buyer demand across India.

This segment remains popular because it offers:

• Better affordability.

• Functional layouts.

• Lower maintenance costs.

• Attractive financing options.

• Higher resale potential.

The continued popularity of mid-sized homes indicates that practical considerations still outweigh aspirational purchases for a large section of buyers.

Housing Supply Continues to Grow Despite Moderating Demand

Developers continue launching new residential projects even as buyer enquiries have become more selective.

Residential Market Trends (April–June 2026)

The increase in supply despite softer demand reflects developers' confidence in the medium- and long-term outlook for India's housing market.

Regional Markets Are Growing at Different Speeds

The report also highlights varying demand trends across cities.

Top Performing Residential Markets

On the other hand, buyer enquiries moderated in:

• Bengaluru

• Hyderabad

• Chennai

Interestingly, property prices continued to rise in several of these cities despite slower demand, reflecting limited premium supply and higher construction costs.

Infrastructure Development Continues to Drive Housing Demand

Improving infrastructure remains one of the strongest catalysts for residential real estate growth.

Projects such as:

• Metro rail expansion.

• New expressways.

• Industrial corridors.

• Airport modernisation.

• IT parks.

• Business districts.

continue increasing the attractiveness of emerging residential locations.

Improved connectivity is encouraging both end-users and investors to explore suburban and peripheral markets offering better value.

Developers Adopt Dual Strategy

The evolving housing market has encouraged developers to diversify their product offerings.

Many leading real estate companies are simultaneously focusing on:

Affordable Housing

• First-time buyers.

• Budget-conscious families.

• Emerging cities.

Premium Housing

• High-income professionals.

• Technology workforce.

• Luxury buyers.

• Investors seeking premium assets.

This balanced strategy enables developers to cater to multiple income groups while reducing dependence on any single market segment.

Key Drivers Supporting the Housing Sector

Several structural factors continue strengthening India's residential market.

Growth Drivers

• Rising urbanisation.

• Expanding middle class.

• Growing employment opportunities.

• Infrastructure development.

• Increasing mortgage penetration.

• Demand from Global Capability Centres.

• Premiumisation of housing.

• Stable long-term demographics.

These factors are expected to support sustained housing demand over the coming decade.

Challenges Facing the Residential Market

Despite the positive outlook, developers and buyers continue to face several challenges.

These include:

• Rising property prices.

• Construction cost inflation.

• Land acquisition expenses.

• Higher borrowing costs.

• Affordability constraints.

• Longer purchase decision cycles.

Balancing affordability with profitability will remain one of the biggest priorities for developers.