Compact flat, builder floor, value deals: India's housing mood turns upbeat

Builder floors surpass plots as top property choice; compact 500-1,000 sq. ft. homes most preferred

After a brief slowdown, India’s housing market is regaining momentum, buoyed by improving affordability, steady prices, and rising income stability. The Housing Sentiment Index (HSI) for July–September (JAS) 2025, released by Magicbricks, shows a rebound to 142, up from 138 in the previous quarter, signaling a clear resurgence in homebuyer confidence despite elevated property prices and borrowing costs.

 

The HSI, which measures homebuyer optimism on a scale where 100 represents neutrality, suggests that buyers are returning to the market with recalibrated expectations.

 

According to the report, Chennai has emerged as the top-performing city in housing sentiment, followed closely by Noida/Greater Noida and Kolkata. 

 

“Affordable and high-potential markets are now outpacing traditional luxury hubs,” the report noted, citing rapid infrastructure upgrades and new project launches across Tier-I and emerging Tier-II zones. Peripheral areas around metros — such as Outer Ring Road in Bengaluru, Dwarka Expressway in NCR, and Whitefield in Chennai — are drawing more interest as buyers seek greater value in well-connected suburbs.

 

Mid-Market Homes Take the Lead

 

Homes priced between ₹1 crore and ₹1.5 crore have become the sweet spot for Indian homebuyers, recording the highest buyer sentiment with an HSI of 149.

 

The report highlights that:

 

39% of buyers continue to target homes priced between ₹20–75 lakh.

 

Another 39% are seeking properties in the ₹75 lakh–₹1.5 crore range.

 

This reflects a broadening of demand toward mid-segment housing, driven by upwardly mobile professionals and first-time homebuyers who view property as a long-term wealth-creation asset rather than just a consumption good.

 

Builder Floors Outpace Plots; Compact Homes Dominate Demand

 

A significant shift is also visible in property preferences. Builder floors have overtaken plots as the most sought-after option, thanks to their semi-customisable layouts, faster possession timelines, and urban location advantages.

 

Compact homes, typically between 500–1,000 sq. ft., have become the preferred size bracket, as buyers prioritize efficiency and affordability without compromising on design or amenities. Semi-furnished homes are gaining popularity, offering a balance between comfort and cost.

 

Millennials Lead, but Gen Z and Baby Boomers Add Stability

 

The Millennial and Gen Y cohorts remain the driving force behind India’s housing demand, especially in metros and IT corridors. However, Gen Z buyers and older investors are increasingly contributing to stable sentiment, reflecting housing’s dual appeal — both as a utility and an asset class.

 

The survey found that professionals in stable industries such as IT, finance, and healthcare showed higher optimism, while households earning ₹10–30 lakh annually recorded the strongest HSI scores, supported by rising disposable incomes and the fear of missing out (FOMO) on future price gains.

 

Most respondents expect property prices to appreciate between 6–10% over the next year, suggesting confidence in steady but not overheated growth.

 

“The rebound in housing sentiment underlines the resilience of India’s real estate market. With prices and interest rates stabilizing, buyers are once again viewing real estate as a safe and rewarding long-term asset. What’s especially encouraging is the strength of the mid-segment and the rise of new growth hubs across Indian cities. Developers who can deliver value, space, and connectivity will be best placed to capitalize on this renewed confidence," said Sudhir Pai, CEO, Magicbricks.

 

Key Highlights from the Magicbricks HSI Report (JAS 2025)

 

India’s Housing Sentiment Index: Rebounded to 142, up from 138.

 

Top Cities: Chennai, Noida/Greater Noida, Kolkata.

 

Strongest Segment: Mid-market homes priced between ₹1–1.5 crore (HSI 149).

 

Property Preferences: Builder floors surpass plots; 500–1,000 sq. ft. homes most preferred.

 

Income Bracket with Highest HSI: ₹10–30 lakh annual income group.

 

Buyer Profile: Millennials dominate; Gen Z and Boomers contribute to stability.

 

Price Outlook: Majority expect 6–10% price appreciation in 2025–26.