New Delhi, March 25, 2025: Amid a substantial rise in the number of wealthy Indians, average property prices in India’s mega cities are rising with sustained intensity, according to the All-India Housing Price Index 2024.
At a time when the number of high net-worth individuals (HNIs) and ultra-high net-worth individuals (UHNIs) in India is expanding at an impressive compound annual growth rate (CAGR) of 12%, demand for premium properties — spanning larger configurations — has surpassed sales in the affordable housing segment, the Index reveals.
The Housing Price Index (HPI), a joint initiative by online real estate advisory platform Housing.com and the Indian School of Business (ISB), tracks changes in the selling prices of new residential properties over time. The HPI serves as a key benchmark for homebuyers, investors, developers and policymakers, offering valuable insights into market trends and price movements. It remains an essential tool for making informed decisions in India’s dynamic real estate landscape.
All-India HPI up 4 points; price growth positive in most cities
For December 2024, the pan-India reading of the HPI stood at 129 points, a four-point jump since January. This yearly growth is supported by a robust demand and a positive consumer sentiment, the company said in its report, highlighting the main findings of the Index data. However, the pace of growth has moderated compared to the previous year — the HPI reading was 132 points in December 2023, a landmark year for Indian real estate.
Barring a few exceptions — Mumbai Metropolitan Region (MMR) and Ahmedabad — most cities covered in the analysis witnessed positive price movement, breaching affordability levels in some cities. This comes at a time when the government is devising new strategies to improve housing affordability.
At 195, the National Capital Region had the highest reading on the Index in December amid an extraordinary boom in demand in the past couple of years. Even as the cost of land and construction hit the ceiling, prominent players from other markets are seen launching their maiden projects here to tap into the demand coming from the rising affluent class in this region. The price rally here is set to continue, driven by infrastructure investments from the Haryana and UP governments and rising equity inflows. Key micro-markets like Dwarka Expressway, Sohna, and Noida Extension remain prime investment hotspots, the report points out.
The ever-expanding commercial prospects positioned Bengaluru and Hyderabad, two of the most prominent IT hubs in the country, at the second and the third spot in the Index, respectively.
“Firming up prices tell a story of growth and affluence for the world’s fifth-largest economy. However, these are also indicative of the rising burden on India’s Middle Class. For real estate to continue a balanced growth narrative, housing affordability remains integral. While positive reinforcements are already being made in the form of better tax breaks as announced in the Union Budget 2025-26 and easing of interest rates, geo-political issues might play spoilsport by further pressuring input costs,” Dhruv Agarwala, group CEO, Housing.com & PropTiger.com said.
Demand grows for premium space as the number of India’s rich grows
Amid the price appreciation, the demand for larger homes is seen picking up, indicating changing preferences of homebuyers in India. While the All-India configuration-wise HPI for December shows a reading of 141 for 3BHK homes after a jump of 11 points since January, the reading for 1BHKs dropped to 117 from 123 in the same period.
“The latest Housing Price Index reveals that housing prices across India stabilised in the final quarter of 2024,” notes Shekhar Tomar, assistant professor of economics and public policy, ISB. “The 3BHK segment continues to show steady price appreciation, driven by sustained demand for larger homes. In contrast, the 1BHK market remains sluggish, with both sales and prices declining. This could indicate a shift in buyer preferences toward more spacious properties or a weakening demand from budget-conscious homebuyers,” Tomar adds.
Note
The Housing Price Index employs a “Laspeyres Price Index” methodology, utilizing granular prices from each locality and their corresponding weightings based on transaction value share. To capture the latest price movements, locality-level prices used for constructing the index are an average of sale and inventory prices. In localities that do not witness any sales in a given month, inventory prices serve as the most updated proxy for sale prices.
Data for the index is collected quarterly across 13 cities: Ahmedabad, Bengaluru, Chennai, Faridabad, Gandhinagar, Ghaziabad, Greater Noida, Gurugram, Hyderabad, Kolkata, Mumbai, Noida, and Pune. Information gathered includes price per square foot, quantity and total value of transactions, number of bedrooms, construction status, and inventory levels.
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