The Indian real estate market has been on a steady rise, and the latest report by CREDAI, Colliers, and Liases Foras reveals a sharp increase in home prices across India's top eight cities. The data for Q4 2024 highlights a 31% YoY surge in Delhi NCR's property prices, marking the highest jump among all major metropolitan regions. Bengaluru followed closely with a 23% increase, reinforcing the ongoing shift in consumer preference towards premium and luxury housing.

This price escalation marks the 16th consecutive quarter of rising home prices since 2021, reflecting a booming demand for both luxury and mid-segment housing. Even as affordable housing remains a dominant segment, the rising costs of land, construction, and infrastructure upgrades have significantly contributed to the upward price trend.

Delhi NCR Leads with a 31% Price Surge

Among India’s top real estate markets, Delhi NCR recorded the highest price jump of 31% YoY in Q4 FY24. The surge was primarily driven by strong demand in luxury and ultra-luxury housing segments, particularly in Dwarka Expressway and Greater Noida, where prices soared by 58% and 52% YoY, respectively.

The rapid infrastructural development in the region, such as the completion of expressways and metro expansions, has further fueled the demand for housing. Premium residential projects along well-connected corridors have gained immense traction, leading to higher property valuations and faster sales cycles.

Bengaluru’s Housing Market Grows by 23% YoY

Bengaluru, India’s technology hub, witnessed a 23% YoY rise in property prices, making it the second-fastest-growing market. Several micro-markets, including Outer West Bengaluru, have experienced price hikes of up to 15% YoY due to rising demand for spacious and high-end homes.

The city’s booming IT sector, influx of skilled professionals, and enhanced connectivity projects have made it an attractive hub for real estate investments. Additionally, the increased focus on sustainable and smart housing projects has also contributed to the price appreciation in the city.

Declining Unsold Inventory Strengthens Housing Demand

For the fourth consecutive quarter, unsold inventory in India’s real estate market has declined, dropping 5% YoY in Q4 2024. The total unsold housing units fell below 10 lakh for the first time in two years, indicating a healthy absorption rate in the market.

• Pune saw the highest decline in unsold inventory at 14% YoY, followed by Hyderabad at 13%.
• Mumbai Metropolitan Region (MMR), which had been struggling with excess supply, recorded its first inventory drop in nearly three years, bringing total unsold units to 3.9 lakh.

The demand for larger homes, especially 3-4BHK apartments, rose significantly, leading to a 34% YoY price increase in this segment. This shift reflects changing consumer preferences, as buyers are now prioritizing spacious and premium residences over smaller configurations.

Luxury Housing Demand Continues to Dominate

While affordable housing remains the backbone of the Indian real estate sector, the luxury housing segment has witnessed unprecedented demand over the past few years. In 2024, premium residential sales outpaced affordable home sales, indicating a growing appetite for high-end living spaces.

Developers are focusing on premium and ultra-luxury housing projects in key cities, with more amenities, sustainable designs, and smart home features to attract homebuyers. This trend is expected to continue in 2025, especially with interest rate cuts anticipated in the coming quarters.

Future Outlook: What’s Next for India’s Real Estate Market?

The Indian housing market is expected to remain strong in 2025, with experts predicting a continued rise in home prices due to multiple factors:

1. Infrastructure development: Cities with upcoming metro projects, expressways, and smart city initiatives will witness higher demand and price appreciation.
2. Evolving consumer preferences: The preference for spacious, premium, and sustainable housing will shape the future of real estate investments.
3. Rising land and construction costs: Increasing input costs will continue to push property prices upward, particularly in prime locations.
4. Potential interest rate reductions: A lower cost of borrowing could further boost housing demand and sales in the upcoming quarters.

Despite global economic uncertainties, India’s real estate market remains resilient, with a robust demand for premium and mid-segment housing. The rise in home prices across Delhi NCR, Bengaluru, and other major cities reflects the sector's strong fundamentals, making it a lucrative investment avenue for homebuyers and investors alike.

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