Nearly Half of India’s Wealthy See Luxury Housing Market Moderating in FY27

India’s luxury housing market may enter a phase of moderation in FY27, even as wealthy investors remain confident about the country’s long-term economic prospects. According to a recent survey by India Sotheby’s International Realty (ISIR), 56% of high-net-worth individuals (HNIs) and ultra-HNIs expect demand and price momentum in luxury housing to soften next fiscal year, following a strong multi-year upcycle. Importantly, this anticipated moderation is being seen as a recalibration rather than a structural slowdown.

What Is Driving the Expected Moderation in the Luxury Housing Market?

After record-breaking activity in recent years, India’s luxury housing market appears to be approaching a more balanced phase. The ISIR survey, conducted among nearly 700 HNIs and UHNIs, suggests that affluent buyers are becoming more selective amid rising prices and limited premium inventory.

While 56% of respondents believe the luxury housing market will moderate in FY27, the remaining 44% expect momentum to continue, reflecting a split outlook rather than outright pessimism. Experts say the anticipated cooling is a natural consequence of sustained growth across major cities, such as Mumbai, Delhi-NCR, Goa, and Alibaug.

Also Read: What Real Estate Stakeholders Expect from Budget 2026

Wealthy Indians Remain Bullish on India’s Economic Growth

Despite expectations of moderation in the luxury housing market, confidence in India’s macroeconomic fundamentals remains strong. The survey found that 67% of HNIs and UHNIs remain bullish on India’s growth story, even amid global economic uncertainties.

In fact, 72% of respondents expect India’s GDP growth to stay within the 6–7% range in FY27, underscoring optimism around domestic consumption, capital markets and long-term wealth creation. This economic confidence continues to underpin real estate investment decisions, especially in prime residential assets.

How Did the Luxury Housing Market Perform in 2025?

The year 2025 proved to be a defining period for India’s luxury housing market, marked by strong absorption and landmark transactions across key urban and lifestyle destinations.

According to ISIR, luxury residential real estate performed exceptionally well in cities such as:

• Mumbai
• Delhi-NCR
• Goa
• Alibaug

Amit Goyal, Managing Director, ISIR, noted that 2026 began on a “note of quiet confidence” after a year of robust performance. He highlighted a meaningful shift in buyer composition, with startup founders, next-generation entrepreneurs and senior professionals joining traditional business families in the luxury segment. Strong equity gains and a record IPO cycle further fuelled purchasing power.

Investment Preferences of HNIs and UHNIs

The survey highlights how wealthy investors are striking a balance between optimism and caution in the luxury housing market.

Preferred Investment Avenues:

• Equities: 67%
• Physical real estate: 64%
• Commodities: 28%
• Financialised real estate (REITs, AIFs, InvITs): 22%

Among those investing in luxury housing:

• 53% cited capital appreciation as the primary objective
• 47% purchased homes for self-use

Return expectations have moderated, with 67% of respondents expecting annualised returns of up to 15%, while only 33% anticipate higher yields—indicating more realistic outlooks.

City Homes Still Top Choice for Luxury Buyers

Within real estate, city-based residential properties remain the most preferred asset class for HNIs and UHNIs.

Break-up of preferred real estate investments:

• Primary residences: 31%
• Investment-grade physical assets: 30%
• Second homes: 21%
• Financial real estate products: 18%

Buyers are increasingly pursuing a dual strategy upgrading homes for personal use while also seeking rental income and long-term capital appreciation in select micro-markets.

Second Homes See Softer Momentum, Farmhouses Lead

Interest in second and holiday homes remains high, but signs of moderation are emerging in the luxury housing market as inventory tightens and prices rise.

• 75% of respondents purchased a second or holiday home in the past year
• However, interest has softened compared to previous periods

Among recent buyers:

• Farmhouses in city peripheries: 46%
• Hill and mountain destinations: 33%
• Beach locations: 21%
• Spiritual destinations: 7%

Improved road connectivity and the preference for destinations within a four-hour drive continue to shape demand for lifestyle assets.

Also Read: Connaught Place Super Bazar Set for Redevelopment as NDMC Initiates Revival

Expert Views on the Future of the Luxury Housing Market

Industry leaders believe the luxury segment is evolving rather than weakening.

Ashwin Chadha, CEO, ISIR, said India’s wealth creation and real estate growth have moved in tandem, supported by resilient capital markets and rising income formalisation. With over 350 billionaires controlling nearly USD 2 trillion in wealth, demand for bespoke residential assets remains structurally strong.

Aakash Ohri, MD & CBO, DLF Home Developers, noted that luxury housing is now driven by lifestyle ecosystems rather than mere opulence, while Sidharth Chowdhry of Dalcore Projects highlighted that branded residences command 30–40% premiums, reflecting the premium placed on design, credibility and curated living.

Conclusion

The outlook for India’s luxury housing market in FY27 points towards moderation rather than a downturn. After several years of exceptional growth, affluent buyers are becoming more selective, return expectations are normalising, and supply constraints are shaping market dynamics.

However, strong economic fundamentals, sustained wealth creation and scarcity of prime assets suggest that luxury housing will remain resilient. As the market matures, quality, location and brand credibility are likely to define performance, ensuring that the luxury segment continues to outperform over the long term even amid near-term moderation.