Delhi NCR, Bengaluru Lead Housing Price Surge; 1BHK Demand Rises Amid Affordability
India's housing price index (HPI) increased by 8 points in March 2025, with Delhi NCR, Bengaluru, and Hyderabad leading the gains. The demand for 1BHK units is on the rise, driven by affordability pressures.
Housing Price IndexReal Estate1bhk DemandDelhi NcrBengaluruReal Estate NewsAug 08, 2025
Delhi NCR led the surge with a 42-point jump compared to the previous year, fueled by investor interest in premium corridors, despite affordability pressures. Bengaluru saw a 29-point rise, though recent trends suggest prices may be stabilizing. Notably, the city also witnessed a sharp uptick in demand for 1BHK units, indicating a shift in buyer preferences amid rising real estate costs.
The index for 3BHK units jumped 12 points in March alone, while 2BHKs, still the most popular among the middle class, remained steady with an index value of 132, the report stated. The Housing Price Index (HPI), a joint initiative between REA India's real estate classified platform Housing.com and the Indian School of Business (ISB), tracks price trends across 13 cities. These cities include Ahmedabad, Bengaluru, Chennai, Faridabad, Gandhinagar, Ghaziabad, Greater Noida, Gurugram, Hyderabad, Kolkata, Mumbai, Noida, and Pune.
Praveen Sharma, CEO of REA India (Housing.com), noted that India’s housing market is undergoing a “healthy consolidation.” He said the recent period of price stagnation follows an extended bull run and is likely to set the foundation for more sustainable growth. He also mentioned that improving affordability, rate cuts, and lifestyle-driven demand could encourage more buyers, especially those priced out in the previous quarter, to return to the market.
Shekhar Tomar, Assistant Professor of Economics and Public Policy at ISB, stated that the current period of stability signals a more mature housing cycle. “This price stability is not a sign of weakness but of balance,” he said. “From Delhi to Ahmedabad, demand remains steady thanks to rising incomes, lifestyle changes, and a shift toward long-term end-user purchases.”
Hyderabad saw a 25-point annual increase, with high demand continuing into 2025, although there were early signs of cooling. In Ahmedabad, the index moved from 113 to 121 due to steady interest in 1BHKs and rental yield-driven investments, the report said. Chennai posted a modest 8-point increase year-on-year but declined slightly quarter-on-quarter, suggesting a short-term correction. Buyers in the city are leaning towards smaller units, with larger configurations losing traction. Kolkata registered a 15-point annual rise, reflecting steady demand in an affordability-driven market where smaller homes dominate.
In contrast, Mumbai’s housing market showed more subdued movement, recording only a 5-point annual gain. The city’s high base continues to weigh on growth, although demand for compact homes like 1BHKs remains solid. Pune was the only major city to see a dip in the index, down 4 points on both annual and quarterly bases. This is attributed to uncertainties in the tech sector, although interest in larger 3BHKs among serious buyers continues to be strong, the report said.
Frequently Asked Questions
What is the Housing Price Index (HPI) and who publishes it?
The Housing Price Index (HPI) is a measure of price trends in the residential real estate market. It is published by REA India in collaboration with the Indian School of Business (ISB).
Which cities saw the highest increases in the HPI in March 2025?
Delhi NCR led the surge with a 42-point increase, followed by Bengaluru with a 29-point rise, and Hyderabad with a 25-point increase.
Why is there a rising demand for 1BHK units in Bengaluru?
The demand for 1BHK units in Bengaluru is rising due to affordability pressures and a shift in buyer preferences towards more compact and cost-effective living spaces.
What factors are contributing to the stability in the housing market?
The stability in the housing market is attributed to rising incomes, lifestyle changes, and a shift towards long-term end-user purchases, as noted by Shekhar Tomar, Assistant Professor of Economics and Public Policy at ISB.
Why did Pune see a dip in the HPI?
Pune saw a dip in the HPI, down 4 points on both annual and quarterly bases, due to uncertainties in the tech sector, which has affected the overall demand for housing in the city.
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