Home Prices Surge 3.5% in Q2, New Supply Slows Down
Residential property prices across major Indian cities increased by 3.5% in the April-June quarter, driven by robust infrastructure development. However, new supply additions were at their lowest in five years, indicating cautious developer behavior.
Real EstateHome PricesInfrastructureAffordable HousingMumbaiReal Estate MumbaiJul 15, 2025
On a year-on-year (YoY) basis, home prices grew by nearly 24% during the April-June period. Infrastructure projects have played a crucial role in driving home price increases, with cities like Pune, Greater Noida, and Kolkata experiencing significant jumps in home prices, all exceeding 30% YoY.
Despite the positive growth, the data also shows that long-term demand, defined by YoY growth, was slow, growing by only 0.3% over the same period. This slowdown is consistent with market sentiments about the cooling down of residential sales, particularly in the premium segments, after the rapid growth in 2023 and 2024.
New supply additions during the quarter were at their lowest in the past five years, signaling a cautious approach among developers and a focus on liquidating existing stock. Prasun Kumar, Chief Marketing Officer at Magicbricks, commented, 'While the overall growth is highly encouraging, the regional nuances highlight evolving buyer preferences and the ongoing need for developers to align supply with specific market demands, especially in the affordable housing segment. We anticipate this positive trajectory to continue, with infrastructure remaining a key growth engine.'
Demand trends across cities have shown some divergence. In IT-driven cities like Bengaluru, Hyderabad, Gurugram, and Noida, buyers are preferring larger homes with three or four bedrooms, which account for around 80% of demand in these cities. In contrast, homebuyers in the Mumbai Metropolitan Region (MMR), the most expensive property market in the country, are opting for more compact homes with one or two bedrooms.
A developer with projects in the western suburbs of Mumbai noted that with above-normal price increases in some suburbs, and with the supply in affordable and mid-ticket categories slowly increasing after a two-year lull, potential homebuyers are deal-hunting and settling for lower ticket prices. Due to Mumbai's elevated real estate prices, there is a wide divergence in ticket price categories across various cities.
Recent improvements in affordability in Mumbai, as indicated by Knight Frank India's Affordability Index, have brought buyers back into the housing market, according to developers and brokers. Along with price increases in higher categories, three consecutive cuts in the repo rate by the Reserve Bank of India have also helped improve affordability in lower ticket sizes through easier access to credit.
Frequently Asked Questions
What is the percentage increase in home prices in the April-June quarter?
Home prices increased by approximately 3.5% in the April-June quarter compared to the previous quarter.
Which cities saw the highest increase in home prices?
Cities like Pune, Greater Noida, and Kolkata experienced significant jumps in home prices, all exceeding 30% year-on-year.
What is the reason for the slowdown in new supply additions?
New supply additions were at their lowest in five years, indicating a cautious approach among developers and a focus on liquidating existing stock.
What are the preferences of homebuyers in IT-driven cities?
In IT-driven cities like Bengaluru, Hyderabad, Gurugram, and Noida, buyers are preferring larger homes with three or four bedrooms.
How has affordability in Mumbai improved recently?
Recent improvements in affordability in Mumbai, as indicated by Knight Frank India's Affordability Index, have brought buyers back into the housing market. Three consecutive cuts in the repo rate by the Reserve Bank of India have also helped improve affordability.
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