Every home sale tells a story. When 77% of them happen in just four cities, that story deserves a closer look.
From booming job markets and mega infrastructure projects to changing buyer aspirations, India’s housing market is becoming increasingly concentrated. But beneath the headline numbers lies another story—one that is quietly unfolding across Tier-II cities.
For years, India’s biggest property markets have attracted a disproportionate share of homebuyers. The latest data shows that this trend has only become stronger.
According to JLL’s Q1 FY26 data, Bengaluru, Mumbai, Pune and Delhi-NCR together accounted for 77% of the 70,631 homes sold across India’s top seven cities. At the same time, the market is moving up the value chain, with homes priced above Rs 1 crore accounting for 71% of residential sales, up from 59% a year ago.
So, what is drawing buyers to these four cities? Is it simply the promise of better jobs and infrastructure, or is something bigger reshaping India’s housing market?
Experts say the answer goes far beyond the headline numbers. It is a story of economic opportunity, rising incomes, changing lifestyle aspirations, trusted developers and evolving buyer preferences. At the same time, another trend is quietly gathering pace, with Tier-II cities emerging as the country’s next growth centres.
WHY THE BIG FOUR CONTINUE TO DOMINATE
The dominance of Bengaluru, Mumbai, Pune and Delhi-NCR isn’t accidental. These cities remain India’s largest employment hubsbenefiting from strong IT, financial services and manufacturing ecosystems. Add to that expanding metro networks, expressways, airports and established social infrastructure, and they continue to attract both homebuyers and developers.
Amit Modi, Director, County Group, believes the combination of economic strength and buyer confidence has kept these cities ahead of the pack.
“Bengaluru, Mumbai, Pune and Delhi-NCR continue to dominate the Indian housing market because they remain the country’s largest job centres, attract significant investments and continue to witness large-scale infrastructure development. Buyers today are also placing greater emphasis on quality, location, timely delivery and the credibility of reputed developers,” he says.
But Manoj Dhanotiya, Founder & CEO, Micro Mitti, argues that the concentration is more about scale than opportunity.
“The 77% number is real, but it’s a concentration of scale, not a concentration of opportunity. These four cities have the deepest developer balance sheets, the largest listed players and decades of brand-led absorption. The real story hiding beneath the headline is that Mumbai and Bengaluru alone accounted for nearly half of total sales,” he says.
WHY ARE BUYERS MOVING TOWARDS PREMIUM HOMES?
One of the biggest shifts in India’s residential market has been the rapid rise of premium housing.
Homes priced above Rs 1 crore now dominate sales across major cities. Higher incomes, changing lifestyles and a post-pandemic preference for larger homes have encouraged buyers to move up the value chain.
Modi says today’s homebuyers are looking beyond affordability.
“The demand for premium housing is being driven by higher discretionary income, changing lifestyle aspirations and the desire for larger, well-designed homes with modern amenities. Buyers increasingly view premium homes as long-term assets that offer better value and appreciation.”
Dhanotiya, however, believes another factor is often overlooked.
“Developers in metros have simply stopped launching homes below Rs 1 crore because rising land and approval costs make the economics unviable. That’s essentially a supply decision being interpreted as a demand trend,” he says.
WHO’S BUYING? END-USERS OR INVESTORS?
Although investor interest remains strong in premium housing, especially in the luxury segment, experts believe genuine homebuyers continue to drive the market.
Modi points to industry data showing that nearly 71% of residential demand comes from end-usersreflecting a strong desire for homeownership and long-term stability.
Dhanotiya believes the picture differs across markets.
“In metros, especially in the Rs 1.5-3 crore and luxury segments, investor and HNI participation is much higher than the industry publicly acknowledges. In contrast, Tier-II cities remain overwhelmingly end-user driven, supported by local employment and professionals returning to their hometowns,” he says.
INFRASTRUCTURE: THE BIGGEST GROWTH ENGINE
Whether it’s the Dwarka Expressway in Gurugram, Bengaluru’s expanding metro network or Pune’s new growth corridors, infrastructure has emerged as one of the strongest catalysts for housing demand.
According to Modi, investments in transport connectivity and job creation have transformed emerging residential locations into highly sought-after destinations.
Dhanotiya believes the same transformation is quietly taking place outside the metros.
“Indore’s Super Corridor, Jaipur’s metro expansion, Coimbatore’s IT corridors and Lucknow’s expressway network are following the same infrastructure-led growth model that built Gurugram and Whitefield—except land remains significantly cheaper and rental yields are higher,” he says.
IS INDIA’S HOUSING MARKET BECOMING TOO METRO-CENTRIC?
While the headline numbers suggest overwhelming metro dominance, experts caution against overlooking India’s fast-growing Tier-II markets.
According to Dhanotiya, residential demand across major Tier-II cities has grown at a much faster pace over the past five years than many metro markets.
“The seven-city reporting framework measures 2010s India. The real momentum is already in Tier-II cities like Indore, Jaipur, Coimbatore and Lucknow, where residential demand has been growing at double-digit rates. The next real estate story won’t be written only in Bandra or Gurugram,” he says.
Modi agrees that Tier-II cities are steadily becoming important growth engines, though he expects metros to retain their leadership.
“The top four metros will remain the key drivers of India’s housing market because of their strong economic ecosystems. However, Tier-II cities are increasingly attracting buyers and developers due to improving connectivity, industrial growth and relatively affordable land. In the long run, they will complement rather than replace the metros,” he says.
CAN AFFORDABLE HOUSING MAKE A COMEBACK?
One of the biggest concerns for policymakers is the shrinking availability of homes priced below Rs 1 crore.
Experts say reviving this segment will require both policy support and structural changes.
Modi advocates targeted tax incentives for first-time buyers, quicker project approvals and city-specific affordability norms that better reflect current market realities.
Dhanotiya believes the affordable housing story hasn’t disappeared—it has simply shifted geography.
“The sub-Rs 1 crore segment isn’t dying; it’s relocating. In many Tier-II cities, Rs 40-80 lakh still buys a quality home with modern amenities. Rather than forcing metro economics to work, the industry should recognise where affordability genuinely exists,” he says.
THE HOUSING STORY IS GETTING BIGGER
The numbers clearly show that Bengaluru, Mumbai, Pune and Delhi-NCR continue to dominate India’s housing market. Their strong economies, expanding infrastructure and growing premium housing segment are likely to keep them at the centre of the property story for some time.
At the same time, another trend is quietly gathering momentum. Tier-II cities are witnessing faster percentage growth, stronger end-user demand and improving infrastructure, creating new opportunities for both buyers and developers.
The future of India’s housing market may not be a battle between metros and smaller cities. Instead, it is likely to be a story of two parallel growth engines—one driven by scale in the country’s biggest urban centres, and the other by rising aspirations and affordability across emerging cities.
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