Surging Home Prices in Key Indian Cities: What’s Driving the Boom?
India’s residential real estate market continues to grow in the second quarter of 2025, with a significant rise in property values and buyer demand. However, the new housing supply is at its lowest in over a year, leading to tight market conditions and price pressure in cities like Pune, Noida, and Kolkata.
Real EstateProperty PricesAffordable HomesInfrastructureMarket TrendsReal Estate PuneJul 07, 2025
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.”
Frequently Asked Questions
What is driving the surge in home prices in Indian cities?
The surge in home prices is driven by a combination of strong buyer demand, limited new housing supply, and large-scale infrastructure projects that improve connectivity and livability in cities like Pune, Noida, and Kolkata.
Which cities are seeing the largest increases in property prices?
Pune, Greater Noida, and Kolkata are witnessing the sharpest jumps in property prices, with Pune seeing a 39.4 percent YoY increase, Greater Noida at 35.3 percent, and Kolkata at 33.2 percent.
What types of properties are in high demand?
There is a strong demand for affordable homes, especially 1BHK units and properties priced under Rs 30 lakh. In tech cities like Bengaluru, Hyderabad, Gurugram, and Noida, spacious 2BHK and 3BHK homes are preferred, while Mumbai Metropolitan Region (MMR) shows a preference for compact 1BHK and 2BHK units.
Why is the new housing supply at its lowest in over a year?
Developers appear to be holding back on new launches, possibly due to a mismatch between what buyers want and what is being built. This has led to a five-quarter low in fresh housing supply.
What does the Q2 2025 PropIndex report by Magicbricks indicate about the Indian real estate market?
The Q2 2025 PropIndex report by Magicbricks indicates a maturing Indian real estate market, driven by genuine end-user demand and the transformative impact of infrastructure projects. It highlights a 3.5% QoQ rise in capital values and a 4.6% QoQ increase in demand.
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