India’s Real Estate Surge: Is the Housing Market Entering a New Era?

India’s housing market has been on a remarkable journey over the past five years, a journey marked by ambition, resilience, and transformation. From the uncertainty of the post-pandemic world to the bustling optimism of today’s urban centers, the real estate sector has scripted a story of unprecedented growth and shifting fortunes.

The Rise: A Market Transformed

Between 2020 and 2025, property prices across India’s major cities soared by an astonishing 48%, as captured by the 1 Finance Housing Total Return Index. This index, which draws real-time data from RERA-registered transactions, leaped from 167 to 247, reflecting a market energized by pent-up demand, robust infrastructure projects, and evolving homebuyer preferences.

City Snapshots: Contrasts and Crossroads

Each city’s narrative has its own flavor:

• Bengaluru emerged as the star, with property values skyrocketing 79%—the sharpest rise among metros.
• Mumbai claimed the title of India’s priciest residential market, with average rates hitting ₹26,975 per sq ft.
• Hyderabad’s skyline grew rapidly, but so did its unsold inventory, which ballooned by 177%.
• Delhi NCR bucked the trend, with unsold stock shrinking 30%, a testament to surging demand.
• Chennai found itself at a crossroads: launches surged 51%, but sales rose just 10%.
• Pune developers, reading the signs, trimmed new launches by 20%.
• Kolkata remained subdued, with a 29% dip in both launches and sales.

Nationally, the numbers tell a tale of robust demand: even as unsold homes increased 32%, sales jumped 33% and new launches only 10%—a clear sign that buyers are still outpacing builders.

The Turning Point: Boom or Balance?

But as the dust settles, a new question looms: Has India’s real estate rally reached its zenith, or is the story far from over?

According to market experts and the 1 Finance team, the days of runaway price jumps are likely behind us. The market is shifting gears—from a frenzied boom to a more balanced, sustainable phase. Infrastructure investments and improved connectivity in Tier 1 cities and their peripheries are expected to anchor this new growth cycle.

Buyer Psychology: Between FOMO and Caution

Today’s buyers are caught in a tug-of-war between the fear of missing out and the anxiety of buying at the peak. As Animesh Hardia, Senior VP – Quantitative Research at 1 Finance, observes, “Existing homeowners are sitting on appreciated assets, but potential buyers are torn between FOMO and fear of buying at the top. It’s leading to impulsive, emotionally driven purchases.”

His advice is clear: consult both real estate and financial experts, rely on data, and avoid decisions driven by hype or social pressure.

What Lies Ahead: The Road to Sustainable Growth

While the era of double-digit annual price surges may be fading, the market’s foundation remains strong. With continued infrastructure upgrades and urban expansion, the rally is evolving—not ending. For homebuyers, the lesson is clear: timing the market is less important than aligning purchases with personal and financial goals.

As India’s real estate market enters this new era, the journey promises steadier, more sustainable growth—a story still being written.