After months of uncertainty and correction, confidence is returning to India’s housing market. The latest Housing Sentiment Index (HSI) has climbed from 138 to 142, suggesting that homebuyers are slowly recalibrating after a period of market moderation. Despite persistent challenges, high prices and firm interest rates, real estate continues to hold its ground as one of India’s most trusted long-term investment assets, alongside gold and equities.
The survey, which captured insights from nearly 2,000 respondents, shows a steady return of optimism led by millennials and Gen Y buyers. This cohort continues to dominate India’s housing landscape, combining aspiration with pragmatism. Interestingly, Gen Z and Baby Boomers are also showing renewed intent, with younger buyers looking for first homes and older investors securing properties for retirement or legacy planning.
A Market Finding Its Balance
The housing market has spent the past year adjusting to a high-cost environment. Prices climbed in most major cities, while borrowing costs stayed elevated. Yet, instead of dampening sentiment entirely, these conditions appear to have nudged buyers toward more measured, long-term decisions. The average allocation toward real estate has eased slightly from 5.6 to 5.1 times annual income, indicating a more cautious, but not retreating, stance.
Buyers are focusing less on speculative gains and more on tangible lifestyle and wealth-building benefits. Many respondents said they intend to purchase within the next three to six months, suggesting pent-up demand could soon translate into transactions. Analysts say this is also driven by a familiar behavioural nudge: the fear of missing out on rising prices as new launches pick up across cities.
The Rise of the Mid-Market Buyer
The sweet spot of the market now lies firmly in the mid-segment. Nearly four in ten respondents are looking for homes priced between Rs. 75 lakh and Rs. 1.5 crore, a range once considered premium in many metros but now representing the core of urban demand. Another 39% still prefer homes between Rs. 20 lakh and Rs. 75 lakh, reflecting that affordability continues to anchor much of India’s residential growth.
This shift points to a broader structural change. As incomes rise and aspirations evolve, mid-income buyers are expanding their budgets to access better amenities, security, and connectivity. Compact formats between 500 and 1,000 sq. ft. are seeing the strongest traction, striking a balance between affordability and comfort. Meanwhile, builder floors are quietly overtaking independent plots, offering ownership with convenience and faster delivery timelines.
City Rankings Tell a New Story
The latest HSI also highlights how the geography of optimism is shifting. Chennai leads the sentiment chart with an index of 163, followed by Noida–Greater Noida at 157 and Kolkata at 155. These cities, often seen as value-driven alternatives to pricier metros like Mumbai or Delhi, are now outperforming traditional luxury hubs.
What’s powering this surge? Infrastructure. From Chennai’s metro expansion to new expressways in Noida and commercial growth in Kolkata, real estate optimism is closely tracking connectivity and job creation. As a result, peripheral zones, once considered too remote are emerging as strong residential contenders. Buyers today are willing to move outward for better value, provided they remain well connected to business districts and social amenities.
A Market Built on Resilience
Even as the market evolves, the underlying sentiment remains clear: real estate continues to be a cornerstone of Indian household wealth. Price expectations among buyers remain moderate but positive, suggesting that the era of runaway speculation has been replaced by steady, sustainable growth. Developers are also becoming more attuned to this mindset, focusing on value-driven products rather than luxury excess.
The rebalancing of sentiment, from exuberance to realism, may be the healthiest signal yet for the sector. It reflects a maturing housing market, one where aspiration meets financial prudence.
What’s Next?
If the current trajectory continues, 2025 could mark a new phase of measured expansion. The next leg of growth is likely to come from well-planned suburban hubs that combine affordability, connectivity, and lifestyle infrastructure. For developers, the challenge will be to deliver this mix, smartly priced, well-located, and sustainably designed homes that speak to India’s evolving middle class.
The HSI’s uptick from 138 to 142 may seem modest, but it tells a powerful story: even amid macroeconomic headwinds, India’s homebuyers remain resilient, hopeful, and ready to invest in the future. The sentiment isn’t just recovering, it’s refocusing.
