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India’s luxury housing sector is witnessing a remarkable transformation in 2025. The first half of the year has seen an exceptional rise in capital values, particularly in the segment of under-construction premium homes. According to a recent report by Savills India, under-construction high-end residential projects have recorded stronger year-on-year (YoY) price appreciation than completed homes, with Mumbai leading the charge. This trend highlights a clear shift in buyer preferences towards modern, future-ready homes that offer better design, location benefits, and long-term value.
Mumbai tops with 44% YoY growth
Among all metro cities, Mumbai saw the steepest rise in prices of under-construction premium homes, with average capital values rising by an impressive 44% YoY. Interestingly, completed high-end properties in Mumbai appreciated only by 1% in comparison, underlining the growing buyer tilt towards new-age luxury residences still under development.
A key reason behind this price surge is the launch of high-end projects in South and Central Mumbai, where developers are offering premium layouts, superior design features, and adherence to Vaastu. These projects also benefit from enhanced connectivity through the upcoming Coastal Road and infrastructure upgrades in the region, making them more attractive to discerning buyers.
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Bengaluru follows with 35% YoY increase
Bengaluru’s real estate market also showcased strong momentum, especially in the high-end under-construction segment. Capital values here rose by approximately 32% to 35% YoY. This spike was largely driven by the growing demand for lifestyle-oriented developments with sustainable design, high-end amenities, and early-stage price advantages.
Central Bengaluru emerged as a hotbed for appreciation in under-construction premium homes, with average prices rising by 45%–48% YoY. The limited availability of land parcels in prime areas, along with high buyer interest in centrally located modern residences, contributed to this upward trend. North Bengaluru followed suit with 32%–35% YoY growth, supported by improving metro connectivity, proximity to the airport, and growing investor interest.
Even completed premium projects in South Bengaluru saw a significant rise, nearly 39% YoY in capital values. This underscores a healthy demand for upscale developments in well-established micro-markets.
Gurugram 33% rise
In the NCR region, Gurugram saw a 33% increase in capital values for under-construction premium homes in H1 2025. The city continues to attract high-income buyers seeking spacious homes in gated communities with lifestyle features. The supply pipeline is active, and developers are introducing new-age homes with a focus on wellness, sustainability, and smart-home readiness.
The trend also reflects a growing investor interest, as many see under-construction premium homes in Gurugram as appreciating assets with better resale potential once completed.
Delhi sees moderate but steady growth
Delhi’s luxury housing market showed a more measured increase. The average capital values of premium floors went up by around 9% YoY at the city level. Among various micro-markets, South East Delhi led with an 11% rise, followed by South West and South Central Delhi with 10% and 9% YoY appreciation, respectively. The growing popularity of larger floor areas and homes with private terraces continues to support this upward pricing trend.
Delhi’s luxury plot market also recorded moderate growth, with city-wide capital values increasing by 7% YoY. Micro-markets such as South East and Central Delhi saw the highest YoY growth of 15% and 12% respectively, supported by limited supply and strong end-user demand.
Why under-construction premium homes are outperforming
The report attributes the sharp appreciation in prices of under-construction premium homes to a combination of several factors. These include the appeal of early-stage pricing, the launch of projects with modern specifications, evolving consumer preferences for design-forward homes, and better connectivity offered by infrastructure improvements in major cities.
There is a notable shift in buyer mindset many affluent buyers today prefer homes that are not just luxurious but also sustainable, well-designed, and future-ready. This demand is pushing developers to innovate and deliver premium offerings with high aesthetic and functional value.
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Outlook for H2 2025 and beyond
According to Savills India, while the Reserve Bank of India’s recent interest rate cuts have provided a supportive backdrop for housing demand, the steep rise in prices especially in key cities, could lead to more selective buyer behavior in the coming months. Market experts suggest that pricing discipline and cautious supply planning will be critical for developers looking to sustain buyer interest in the under-construction premium homes segment.
With more infrastructure upgrades, demand for smartly positioned high-end developments is expected to remain strong. However, developers may need to ensure that pricing stays realistic and aligned with actual demand in order to maintain market momentum.
Conclusion
The first half of 2025 has clearly shown that under-construction premium homes are leading the luxury housing boom across India. With double-digit YoY appreciation rates in cities like Mumbai, Bengaluru, and Gurugram, this segment is becoming a preferred choice for both homebuyers and investors. As urban lifestyles evolve and expectations rise, under-construction luxury projects offering a blend of location, design, and future-readiness are well-positioned to shape the next phase of premium real estate in India.
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Ans 1. Under-construction homes are offering modern layouts, better designs, and future-ready amenities at early-stage prices, which appeal to today’s luxury buyers. These factors are driving higher appreciation compared to completed homes.
Ans 2. Mumbai has seen significant launches in prime areas like South and Central Mumbai, backed by infrastructure projects like the Coastal Road. This, along with luxury features and location benefits, has pushed prices up by 44% YoY.
Ans 3. Bengaluru has witnessed a strong surge in high-end under-construction projects, especially in Central and North Bengaluru, due to limited land supply and rising demand for centrally located, well-designed homes.
Ans 4. Gurugram’s rise is fuelled by demand for smart, wellness-oriented homes in gated communities. With active supply and investor interest, capital values have jumped by 33% in H1 2025.
Ans 5. Delhi is seeing moderate but steady growth, with a 9% rise in premium floors and 7% in luxury plots. Demand is strong in areas like South East and Central Delhi due to limited supply and a preference for larger units.
Ans 6. Yes, the RBI’s recent rate cuts have supported housing demand, but with prices rising fast, buyers may become more selective, making pricing discipline important going forward.
Ans 7. The demand for under-construction premium homes is expected to stay strong, especially in areas with improving infrastructure. However, developers will need to align pricing with market expectations to sustain this momentum.