Will India’s 1,000 – 5,000 sq ft Home Demand Crash by 2030? A Data-Led Reality Check

Will India’s 1,000 – 5,000 sq ft Home Demand Crash by 2030? A Data-Led Reality Check

 

Some forecasts claim demand for 1,000–5,000 sq ft homes in India could fall by 90% by 2030. That’s a dramatic headline — but does the data support it?

 

1) What counts as “1,000–5,000 sq ft” in India?

This range mixes upper-mid apartments (around 1,000–1,800 sq ft), premium/luxury apartments (often 1,800–3,000 sq ft), and villas/ultra-luxury (3,000–5,000+ sq ft, location-dependent).
So demand drivers are not one thing—they vary by city, income segment, supply type, and price band.

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2) What the recent market direction actually shows

Across multiple reports and updates, India’s residential market has shown a shift toward premium/luxury in recent years (even when overall units sold soften), and price growth has remained firm in many top markets.

Examples of “premiumisation” signals:

• JLL noted premium housing demand grew in the first nine months of 2025 even though overall unit sales were down year-on-year.
• ANAROCK reports show price appreciation across top cities and commentary that demand composition has evolved toward higher ticket sizes.
• Media coverage of 2025 highlights a pattern: unit sales fell but total sales value rose, implying higher average ticket sizes / premium mix.

Bottom line: the recent baseline trend is not consistent with a 90% collapse.

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3) So… could it still happen? Yes—but only under extreme combined shocks

For a 90% demand drop by 2030, you’d need multiple big negatives at once, such as:

A) Affordability shock + sustained high rates

If mortgage affordability deteriorates sharply for years (rates stay high + incomes don’t rise), larger homes get hit first because EMIs scale fast.

B) Major shift to smaller unit preferences (structural)

A real structural change could come from:

• smaller households / different lifestyle choices
• “location-first” buying pushing people into smaller central units
• strong rental preference (especially for large homes) due to yields and maintenance

C) Oversupply in specific premium corridors

If developers overbuild large-ticket homes in certain micro-markets, you can see localised demand collapses (inventory piles up → discounts → fewer new buyers).

D) Job/income shock in high-paying sectors

Luxury/premium housing is sensitive to confidence in business/tech/finance. Reuters has highlighted cooling demand and stress signs in parts of the market.

But you would still struggle to get a nationwide -90% without a deep, prolonged macro crisis.

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4) A more realistic outlook: 3 scenarios (useful for investors + builders)

Here’s a smarter frame for 2030:

Scenario 1: Base case (most likely)

• Demand for 1,000–5,000 sq ft homes does not collapse
• It shifts: more demand concentrates in specific cities, infrastructure-led corridors, and high-quality projects
• Larger homes become more premium + more selective

Scenario 2: Bear case (possible)

• Demand declines meaningfully in oversupplied micro-markets
• Buyers prefer 1,000–1,500 sq ft “efficient luxury” over very large layouts
• Net effect: a moderate decline, not a wipeout

Scenario 3: Extreme case (unlikely)

• Multi-year affordability + job shock + oversupply
• Could lead to a very sharp contraction—but still likely to be regional, not “India overall -90%”

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5) What should developers, brokers, and investors do now?

If you’re selling larger homes, the winning strategy is positioning—not panic.

Actionable playbook:

• Sell “usable space” (layout efficiency) over “big number”
• Add work-from-home rooms, storage, utility, and premium maintenance promise
• Target buyer cohorts: HNIs, business owners, NRIs, upgrade buyers
• Focus on micro-markets with infrastructure connectivity and strong end-user ecosystems (schools, hospitals, commute)

 

© Dhananjay Parmar

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