The Indian real estate market in 2025 is defined by robust price growth, evolving affordability, and shifting buyer dynamics. Data from across the country reveals nuanced trends, with regional variations and broader national patterns shaping the landscape for both buyers and investors.
Price Growth: Strong but Moderating
Residential property prices have continued to rise in 2025, with average increases between 10% and 34% across India’s top seven cities in the first quarter alone. The National Capital Region (NCR) and Bengaluru have experienced the steepest annual jumps, with NCR seeing more than a 34% rise and Bengaluru over 20%. This surge is largely driven by new supply in the luxury and ultra-luxury segments, as well as sustained demand from affluent buyers.
However, this rapid price escalation has led to a significant 28% year-on-year drop in housing sales in Q1 2025, indicating that affordability is becoming a challenge for many buyers. Experts note that while the post-pandemic years of 2022 and 2023 saw double-digit price growth, the rate of increase is moderating in 2025, with most forecasts predicting a single-digit rise for the year ahead.
Affordability and Interest Rates
Affordability has been under pressure due to rising prices and relatively stagnant interest rates in recent years. However, a projected cumulative 50-basis-point cut in interest rates is expected to improve affordability in 2025, especially in cities like Mumbai and Pune, which are likely to approach optimal affordability levels. Kolkata is expected to remain the most affordable major city, while NCR and Bengaluru, despite price growth, should see better affordability than in previous years.
The Reserve Bank of India’s anticipated shift in monetary policy, combined with moderate price growth and sustained income increases, is expected to create a more conducive environment for home purchases over the next 12–18 months.
Market Segmentation: Luxury vs. Affordable Housing
The luxury and premium housing segments are driving much of the price growth, with developers focusing on high-end projects due to strong demand from wealthy individuals. This emphasis has led to a shortage of affordable homes, sidelining many first-time and middle-income buyers. Experts predict that while luxury housing will remain robust, there will be a growing need for more launches in the mid and bridge-to-luxury segments to balance the market.
Regional Trends and Supply Dynamics
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Sales and New Launches: Mumbai Metropolitan Region (MMR) and Pune accounted for over half of total sales in Q1 2025, though both cities saw significant year-on-year declines. Hyderabad experienced the steepest drop in sales, while Bengaluru had the lowest decline among the major cities.
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Supply Pipeline: New launches remain healthy, though they dipped by about 10% compared to the previous year, suggesting a cautious approach from developers in response to market conditions.
Outlook for Buyers and Investors
While the days of rapid double-digit price growth appear to be over, a stable single-digit increase in property prices is expected in 2025. Urban migration, infrastructure development, and a young, growing population will continue to support demand and price appreciation. However, buyers are becoming more value-conscious, and there is resistance to high-priced launches without clear benefits.
In summary, 2025 is shaping up to be a year of continued but more moderate price growth in Indian real estate, with gradual improvements in affordability anticipated as interest rates ease. For buyers and investors seeking data-driven insights and seamless property transactions, Hexahome by Hexadecimal Software Pvt Ltd offers advanced tools to help navigate this dynamic market.
