Surging Home Prices in Key Indian Cities: What’s Driving the Boom?
India’s residential real estate market kept up its growth momentum in the second quarter of 2025, with a steady rise in property values and buyer demand. But even as home seekers remained active, new housing supply has fallen to its lowest level in over a year, creating tight market conditions and price pressure in many cities.
According to ANI citing Q2 2025 PropIndex report by Magicbricks, capital values of residential properties across India rose 3.5% quarter-on-quarter (QoQ), reflecting healthy buying interest. Demand also jumped 4.6 percent QoQ, although it remained almost flat on a year-on-year basis, growing by just 0.3 percent YoY.
One of the standout trends this quarter was the strong and sustained demand for affordable homes, especially 1BHK units and properties priced under Rs 30 lakh. These segments continued to see demand far outstripping supply, leading to competitive pricing and fewer choices for budget-conscious buyers.
However, developers appear to be holding back on new launches. The report highlights that fresh housing supply hit a five-quarter low, signalling a possible mismatch between what buyers want and what’s being built.
In tech cities like Bengaluru, Hyderabad, Gurugram, and Noida, most buyers preferred spacious 2BHK and 3BHK homes, which made up nearly 80 percent of all demand. These preferences suggest that post-pandemic lifestyle shifts, such as the need for home offices or more family space, are here to stay.
On the other hand, Mumbai Metropolitan Region (MMR) continued to show a strong tilt towards compact living, with 1BHK and 2BHK units dominating buyer interest. This reflects both the space crunch and high price points typical of Mumbai’s housing market.
Cities witnessing large-scale infrastructure upgrades recorded the sharpest jumps in property prices:
Pune saw an astonishing 39.4 percent YoY price rise, Greater Noida followed closely at 35.3 percent, Kolkata posted a 33.2 percent increase.
Experts attribute this surge to major projects like the Navi Mumbai International Airport, Mumbai Trans Harbour Link, and metro expansions, which are boosting real estate prospects by improving connectivity and livability.
Market maturing, says Magicbricks
Commenting on the findings, Prasun Kumar, CMO at Magicbricks, said: “The Q2 2025 PropIndex clearly indicates a maturing Indian real estate market, driven by genuine end-user demand and the transformative impact of infrastructure.”
