India's premium residential real estate market recorded capital value growth of up to 28 per cent year-on-year in the first half of 2026, according to a report by Savills India released on Tuesday, 14 July. The surge was driven by higher construction costs stemming from elevated crude oil prices and supply chain disruptions linked to ongoing geopolitical conflicts.

City-wise Capital Value Gains

Noida led the pack with the steepest increase, recording capital value growth of approximately 4–28 per cent year-on-year for premium under-construction homes. Mumbai followed with a 10–15 per cent year-on-year rise in the same segment, while Bengaluru posted gains of 3–11 per cent. Gurugram saw a comparatively modest uptick of up to 2 per cent year-on-year.

For completed premium homes and luxury floors, Delhi led with annual average capital value increases of 10–25 per cent year-on-year. Bengaluru followed at 8–10 per cent, while Mumbai recorded a 2–7 per cent rise, with demand supported by end-users seeking spacious configurations and wellness-centric amenities.

What Is Driving Demand

Sustained demand from affluent homebuyers, high-net-worth individuals (HNIs), non-resident Indians (NRIs), entrepreneurs, and corporate professionals has continued to underpin market performance. A strong preference for branded, amenity-rich developments in well-connected growth corridors has reinforced this trend.

According to the Savills India report, the market is transitioning from rapid repricing towards more sustainable value creation, supported by premiumisation, rising incomes, calibrated supply, and an enduring preference for quality. India's robust economic fundamentals, ongoing infrastructure development, and sustained domestic wealth creation have reinforced investor confidence, positioning premium residential real estate as a preferred long-term asset class.

What Industry Leaders Said

Shveta Jain, Managing Director, Residential Services, Savills India, said: 'Buyer preferences are becoming increasingly discerning, with greater emphasis on location, product quality and developer credibility, signalling a shift towards quality-led demand.'

Rental Market Remains Buoyant

Premium residential rental values also recorded an upward trend across key cities in the period, driven by sustained demand for quality ready homes, limited inventory of completed properties, and a continued preference for well-connected, lifestyle-led developments. The report noted that constrained supply of completed premium stock has been a key factor keeping rental yields elevated.

What to Watch

With geopolitical tensions continuing to exert pressure on construction input costs and crude oil prices remaining elevated, analysts will be watching whether the pace of capital value appreciation moderates in the second half of 2026. The interplay between calibrated new supply and persistent high-end demand will be the key variable shaping premium residential pricing through the remainder of the year.