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Property Prices Continue to Climb in India’s Major Cities

Residential property prices across India s largest urban centres are witnessing steady growth as the number of affluent individuals in the country continues to rise. According to a recent nationwide housing price analysis for 2024, the growing wealth of high-income individuals is significantly influencing demand in the real estate sector. India has seen a strong increase in high net-worth individuals (HNIs) and ultra-high net-worth individuals (UHNIs) , expanding at an estimated compound annual growth rate (CAGR) of around 12% . This rising affluent population has boosted the demand for premium residential properties, especially larger homes with spacious configurations. As a result, sales in the premium housing segment have begun to outpace those in the affordable housing category , reflecting changing buyer preferences and higher purchasing power among wealthy buyers. National Housing Price Index Shows Moderate Growth The nationwide housing price index, which tracks the selling prices of newly launched residential properties across various cities, recorded a reading of 129 points in December 2024 , representing an increase of four points compared to the start of the year. This growth indicates strong housing demand and positive market sentiment among buyers. However, the pace of price growth has slowed slightly compared to the previous year, when the index stood at 132 points in December 2023 , a period widely considered a record year for the Indian real estate sector. The housing price index serves as an important indicator for homebuyers, investors, developers, and policymakers , helping them understand market trends and price movements in the residential property sector. Property Price Growth Observed in Most Cities Most cities included in the analysis experienced positive price growth , although a few markets such as the Mumbai Metropolitan Region (MMR) and Ahmedabad showed limited movement in prices. In several urban markets, rising prices have begun to test affordability levels for middle-income buyers. At the same time, policymakers are exploring strategies to improve housing accessibility and maintain balanced market growth. Delhi NCR Records Highest Price Index Among the cities studied, the National Capital Region (NCR) recorded the highest index score of 195 in December , reflecting a strong surge in housing demand over the past few years. Rapid infrastructure development and strong demand from affluent buyers have encouraged many major real estate developers to launch projects in this region for the first time. Key emerging investment locations in the NCR include: Dwarka Expressway Sohna Noida Extension Continued infrastructure investments by the governments of Haryana and Uttar Pradesh , along with rising capital inflows, are expected to sustain the price momentum in the region. IT Hubs Bengaluru and Hyderabad Rank Next India s major technology centres, Bengaluru and Hyderabad , secured the second and third positions respectively in the housing price index rankings. Both cities continue to benefit from strong employment opportunities, expanding commercial sectors, and growing demand for residential properties from professionals working in the technology industry. Demand Shifts Toward Larger Homes The report also highlights a growing preference among buyers for larger residential units . Data from the configuration-wise housing price index indicates: 3BHK homes recorded an index reading of 141 in December 2024 , rising by 11 points since January. 1BHK units declined to 117 points , down from 123 earlier in the year. This trend suggests that buyers are increasingly opting for spacious homes , possibly influenced by lifestyle changes, work-from-home needs, and improved financial capacity among higher-income groups. Changing Buyer Preferences in the Housing Market Market experts believe the shift toward larger homes reflects evolving consumer priorities in the residential real estate sector. While demand for premium and spacious housing remains strong, the budget housing segment appears to be facing slower growth. A decline in demand for smaller apartments may indicate that budget-conscious buyers are becoming more cautious , while wealthier buyers continue to drive the market through purchases of premium residential properties.