Housing price index up 8 points in FY25, growth led by Delhi NCR and Bengaluru
India’s Housing Price Index rose 8 points in FY25 despite a 3-month stagnation, reflecting strong demand, especially for 3BHKs, with Delhi NCR, Bengaluru, and Hyderabad driving regional growth.
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India’s housing market may be cooling in the short term, but long-term confidence remains intact, according to the latest Housing Price Index (HPI) released by Housing.com and the Indian School of Business (ISB). The index shows that housing prices remained stagnant for the third consecutive month in March 2025, despite macroeconomic uncertainty and supply-side challenges.
However, on a year-on-year basis, the data paints a more optimistic picture. The HPI rose 8 points in FY25 (April 2024 to March 2025), closing at 132, suggesting resilient buyer sentiment and a continued preference for real estate as a key asset class for Indian consumers.
“The Indian housing market is currently in a phase of healthy consolidation. After an extended period of price escalation across major cities, we are now seeing a welcome stabilisation in values. This price stagnation, while reflective of cautious market sentiment and supply-side adjustments, is also laying the foundation for more sustainable growth. We expect this trend to continue in the near term, which could encourage more end-users—particularly those priced out during the recent bull run—to return to the market,” said Praveen Sharma, CEO, REA India (Housing.com).
As per the report, the price stabilisation is being driven by a mix of global headwinds, cautious consumer sentiment, and reduced project launches. However, the fundamentals remain strong, supported by rising incomes, lifestyle changes, and the popularity of hybrid work models.
Demand for larger home continues to climb, with 3BHK units seeing a 12-point jump in March 2025 alone. Meanwhile, 2BHKs remain the go-to choice for middle-class urban buyers.
The data highlights that Delhi NCR led the surge with a 42-point rise, fueled by investor demand in premium zones. While Bengaluru recorded a 29-point YoY spike, though prices have plateaued recently. Interestingly, 1BHK units saw a sharp jump from 176 to 217.
Shekhar Tomar, Assistant Professor of Economics and Public Policy, ISB said," The current price stability points to a more mature and balanced housing market—moving beyond speculative surges and aligning with long-term fundamentals. Even amid global uncertainties, steady demand across cities reflects rising incomes, shifting lifestyle priorities, and growing end-user confidence. From Delhi-NCR to Bengaluru and Ahmedabad, this broad-based momentum highlights the economic resilience underpinning residential real estate in India."
Meanwhile, Hyderabad rose by 25 points, posting the highest quarter-on-quarter growth. Ahmedabad saw an increase from 113 to 121, thanks to rising interest in affordable 1BHK homes. However, Chennai posted a modest 8-point YoY rise, but dipped 3 points QoQ.
Kolkata grew by 15 points, with 1BHKs leading demand. MMR (Mumbai Metropolitan Region) saw only a 5-point annual rise, attributed to a high base. Demand for 1BHKs remained steady. Pune was the only market to decline, dropping 4 points amid IT sector uncertainty, although premium 3BHKs remain in demand.
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Going forward, price moderation is expected due to high base effects and improved supply. However, sales momentum is likely to continue, particularly as speculative activity cools and buyer focus shifts to end-use purchases.
Adding to the optimism is the Reserve Bank of India’s recent 50-basis-point rate cut, bringing the total to 100 basis points over three policy meetings. This move is likely to push home loan interest rates below 8%, improving affordability.
