Premiumisation trend playing in real estate sector, but affordability remains a key concern: Nuvama

New Delhi [India], July 24 (ANI): The real estate sector in India is witnessing a clear trend of premiumisation, but affordability is emerging as a major concern, according to a report by Nuvama.

The report highlighted that while the demand for premium and luxury homes continues to grow, this has not translated into a significant increase in overall housing volumes. Instead, the growth in sales value has outpaced the growth in volumes.

For instance, the report mentioned that in June 2025, the sales volume across the top seven cities rose only 1 per cent year-on-year (YoY), while sales value jumped 23 per cent YoY.

This indicates a shift towards high-value properties, showing that people are buying more expensive homes even though the number of houses sold has not increased much.

It stated the premiumisation trend is playing out in the industry, which is evident from the fact that the rise in sales volumes is lower than the increase in sales value.

However, in the second quarter of calendar year 2025 (Q2CY25), sales by value increased 9 per cent YoY, though it was down 4 per cent on a quarter-on-quarter (QoQ) basis.

The National Capital Region (NCR) led the growth, recording a 58 per cent YoY rise in sales value. Chennai followed with 37 per cent growth, while Bengaluru and Kolkata saw modest increases of 13 per cent and 2 per cent respectively.

However, not all cities performed well. Housing absorption fell significantly in Pune and the Mumbai Metropolitan Region (MMR), with both cities recording a 11-15 per cent YoY decline. Hyderabad also saw a 5 per cent fall in absorption during Q2CY25.

While RERA-driven consolidation is opening up new growth opportunities for organised players in the sector, the report mentioned that the affordability of homes is becoming a key issue.

With property prices rising sharply, especially in premium segments, more people may find it difficult to buy homes in the coming quarters.

Due to strong demand in the premium segment, prices have surged across all major cities. The NCR witnessed the highest price increase, with average prices rising 26 per cent YoY. Chennai followed with a 21 per cent hike. Bengaluru and Kolkata each saw prices go up by 14 per cent YoY.

According to the report, absorption for organised developers is expected to improve with more project launches. However, the pressure on affordability could weigh on the overall demand, especially in the mid-income housing segment. (ANI)

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