India’s housing market sustained its growth trajectory in the first quarter of 2025, with property prices rising across all major cities, driven by strong demand for premium, high-rise developments. Bengaluru and the National Capital Region (NCR) led the surge, recording annual price increases of 16% and 12%, respectively. Mumbai, maintaining its status as the most expensive market, experienced a 6% rise in average prices. Hyderabad and Kolkata saw 9% growth, Chennai 7%, while Ahmedabad recorded the slowest increase at 2%.
The luxury housing segment, particularly properties priced above ₹1 crore, significantly contributed to this upward trend. This category accounted for 46% of total sales in the March quarter, up from 40% during the same period in 2024. Ultra-luxury homes, priced at ₹50 crore and above, experienced a remarkable 483% surge in sales. Conversely, sales in the sub-₹50 lakh category declined by 9%, indicating a shift towards larger, premium residences among buyers.
Despite concerns about potential overheating in certain segments, the market’s premiumization trend reflects homebuyers’ aspirations for enhanced lifestyles and more spacious living environments. However, the significant price appreciation in cities like NCR and Bengaluru led to a slight dip in sales volumes, suggesting that affordability may become a constraint if prices continue to escalate.
The robust demand has also impacted the supply side, with new launches outpacing demand for the tenth consecutive quarter. In Q1 2025, 96,309 units were introduced to the market, marking a 3% year-on-year increase. This sustained influx of new supply indicates developers’ confidence in the market’s resilience and their anticipation of continued demand, particularly in the premium segment.
Looking ahead, industry experts anticipate that housing demand will remain strong, bolstered by tax incentives introduced in the recent budget and a reduction in the repo rate. These factors are expected to enhance affordability and stimulate further growth in the housing sector, although short-term fluctuations may occur in markets that have experienced rapid price escalations.
As the market evolves, the interplay between developers and homebuyers will be crucial in shaping trends for the remainder of the year. Balancing price growth with affordability will be key to sustaining the momentum in India’s residential property market.
