Housing Prices Surge in Key Indian Cities, Led by Premium Home Demand
India's residential real estate market saw a significant rise in home prices during the first half of 2025, driven by a surge in demand for premium homes. NCR and Bengaluru led the way, while Mumbai remained the most expensive market.
Residential Real EstateHousing DemandPremium HomesReal Estate MarketProperty PricesReal Estate NewsJul 03, 2025
Average housing prices rose across all major cities, with the National Capital Region (NCR) and Bengaluru posting the steepest year-on-year gains of 14%, followed by Hyderabad at 11% and Mumbai at 8%, according to data from Knight Frank India.
This upswing in pricing was largely driven by a rise in the share of high-ticket home sales and a growing shift in supply toward premium inventory. Developers launched a larger proportion of homes in the Rs 1-5 crore and Rs 5-10 crore segments, pushing up weighted average prices across the board.
Mumbai remained the most expensive market, while Ahmedabad continued to be the most affordable among the top eight cities. Of the 1.7 lakh housing units sold across the top eight markets, nearly half or 49% were priced above Rs 1 crore. Sales in the Rs 1-2 crore bracket rose 17% year-on-year, while those in the Rs 2-5 crore range surged by 29%, underscoring the shift in homebuyer preferences toward larger, better-located, and more amenity-rich residences.
Mumbai, NCR, and Bengaluru led the premium segment by volume. NCR saw 81% of its sales in the Rs 1 crore-plus category, while Bengaluru recorded 70% and Mumbai 36%, the data showed. In contrast, affordable housing, particularly homes priced below Rs 50 lakh, continued to lose steam, with sales down 18% year-on-year. New supply in this segment also dropped by 31%, highlighting limited developer interest in lower-margin offerings.
Still, the affordable and mid-income housing segments could see a turnaround in the coming quarters. The Reserve Bank of India’s cumulative 100-basis-point cut in policy rates over the past six months has lowered borrowing costs and may revive demand in the mass market, especially among first-time buyers.
Despite a 4% rise in unsold inventory to 5.05 lakh units, the overall market remained healthy with the Quarters-to-Sell (QTS) ratio steady at 5.8. Notably, the QTS for homes in the Rs 2-5 crore category was much healthier at 3.9 quarters, reflecting strong traction in the mid-premium range.
Frequently Asked Questions
What cities saw the steepest increase in housing prices in H1 2025?
The National Capital Region (NCR) and Bengaluru saw the steepest year-on-year gains of 14%, followed by Hyderabad at 11% and Mumbai at 8%.
What segment of the housing market is driving the price increase?
The premium segment, particularly homes priced above Rs 1 crore, is driving the price increase. Sales in the Rs 1-2 crore bracket rose 17% year-on-year, while those in the Rs 2-5 crore range surged by 29%.
How are affordable housing sales performing?
Affordable housing sales, particularly homes priced below Rs 50 lakh, have declined by 18% year-on-year. New supply in this segment also dropped by 31%.
What impact has the Reserve Bank of India's policy rate cut had on the housing market?
The Reserve Bank of India’s cumulative 100-basis-point cut in policy rates over the past six months has lowered borrowing costs, which may revive demand in the mass market, especially among first-time buyers.
What is the current state of unsold inventory in the housing market?
Despite a 4% rise in unsold inventory to 5.05 lakh units, the overall market remains healthy with the Quarters-to-Sell (QTS) ratio steady at 5.8. The QTS for homes in the Rs 2-5 crore category is much healthier at 3.9 quarters.
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