 "Mid-segment set to anchor housing market in 2026 as premium cycle peaks")
As India’s premium and luxury housing cycle shows early signs of peaking, the mid-segment (homes priced between Rs 80 lakh and Rs 1.5 crore) is expected to emerge as the primary growth driver of the residential market in 2026, according to a report by proptech platform Square Yards.
With housing inflation moderating and price growth stabilising in several saturated micro-markets, affordability for mid-income buyers is set to improve, prompting a visible shift in demand.
Why is the mid-segment gaining momentum?
The segment stands to benefit from a combination of stable pricing, better-quality product offerings and infrastructure-led expansion into peripheral urban corridors. As a result, the mid-segment is poised to drive incremental demand, provided developers actively participate and execute at scale.
Sudarshan Banerjee, senior vice-president, marketing, Ashwin Sheth Group, believes that the mid-segment has emerged as the most structurally sound and demand-driven part of the housing market. As price growth in premium pockets moderates, Banerjee noted that affordability dynamics are improving for mid-income buyers, encouraging a shift towards this category. From a developer’s standpoint, he said demand is largely end-user-led, with buyers seeking a balance between pricing, quality and long-term livability.
What changed in the housing market in 2025?
The year 2025 marked a broader shift towards value-led growth, characterised by stable transaction volumes and a continued rise in overall market value, even as premium and luxury segments showed early signs of saturation in select mature markets.
According to the Square Yards report, registered residential transactions across India’s nine prime residential markets declined 5 per cent year-on-year in 2025, while total sales value rose over 11 per cent, driven by a 22 per cent increase in average deal sizes.
How are regional markets responding?
Western India accounted for more than 80 per cent of total registered sales value in 2025, supported by higher ticket sizes. Southern markets such as Bengaluru and Hyderabad continued to see strong end-user participation. In the National Capital Region, demand remained sharply price-segmented, with affordable and mid-market categories driving volumes, reflecting a more diversified and mature buyer profile.
“This divergence reflects a maturing market, where growth is increasingly shaped by demand rather than volume-led expansion,” said Tanuj Shori, founder and chief executive officer, Square Yards. He added that while premium and luxury housing dominated value contribution in 2025, particularly in markets such as the Mumbai Metropolitan Region, sustained price appreciation over the last three to five years has begun to test affordability thresholds in several premium micro-markets.
As a result, incremental growth in the luxury segment is expected to moderate in 2026, signalling stabilisation rather than a slowdown.
What are developers seeing on the ground?
Developers on the ground echo this assessment. Samyag Shah, director of Marathon Nextgen Realty and convenor of Credai-MCHI Youth Wing, said the mid-segment has been the company’s most consistent and dependable category, adding that integrated planning, ready social infrastructure and transparent pricing are key conversion drivers.
Vishal Ratanghayra, founder and chief executive officer, Platinum Corp., said homebuyers are shifting focus from ultra-premium addresses to well-planned mid-segment homes that offer real value.
The residential sector is moving from a phase of expansion to equilibrium. 2026 is likely to witness broader-based, end-user-led growth anchored in value rather than exuberance. Transaction volumes are expected to remain steady, average ticket sizes elevated, and price growth more evenly distributed across segments. Sujay Kalele, founder and CEO, Tru Realty, said, “For the mid-segment, the outlook is focused on the sector's breadth. It consistently accounts for roughly a fifth to a quarter of demand, and is increasingly end-user-dominated. Our outlook is that developers who standardise design, tighten execution, and build around commute-and-convenience nodes will see faster absorption and healthier, lower-risk cashflows.”