If you are planning to invest gains made in the stock market into real estate or intend to buy property for end-use in 2025, your expectations in terms of property appreciation should be realistic. According to real estate experts, the housing market is likely to record a moderate single-digit price increase in 2025 compared to the double-digit growth of 21% witnessed last year.
They said that key areas near commercial hubs in major cities and a few peripheral locations are expected to see sharper price increases.
Compared to 2023, 2024 saw a 21% rise in the average price in the top seven cities, but 2025 is unlikely to match this steep growth. Average residential price hikes will stabilise in the coming year, though there will be steady growth amid increased input costs and high demand. 2025 may witness generous new supply infusions by listed developers with significant inventory lined up.
Anarock chairman Anuj Puri expects the housing market to ‘stabilise’ in 2025, with muted price growth against an average 21% year-on-year rise during 2024. “Much also depends on what the upcoming Union Budget holds in store,” he said.
Data trends indicate that there is a healthy pipeline of new supply by listed developers in 2025. As long as the Indian economy remains strong with no major impact of global headwinds, including geopolitical tensions, sales will remain healthy, and prices will continue to trend upward, he said.
He noted that prices may not grow to the extent seen in 2024, but increasing land and input costs will prevail on developers to increase property prices.
“We can also expect some rate cuts by the RBI, which would reduce interest rates for homebuyers, reinforcing the long prevalent preference for homeownership as opposed to renting. Of course, a lot also depends on what the upcoming Union Budget holds in store,” he said.
As per data shared by Anarock, on an annual basis, housing prices rose between 13-30% across the top 7 cities, primarily due to increased input costs and strong homebuyer demand. Delhi-NCR recorded the highest yearly jump of 30% in average residential price – from ₹5,800 per sq. ft. in 2023 to nearly ₹7,550 per sq. ft. in 2024. The top 7 cities together saw a 21% yearly jump in average residential price – from ₹7,080 per sq. ft. in Q4 2023 to over ₹8,590 per sq. ft. in Q4 2024.
Another report by Anarock noted that peripheral cities are likely to have a higher scope of price appreciation than prime areas. Newer micro markets saw higher growth in pricing than metro cities, with prices increasing by up to 70% in six years – Bengaluru’s Gunjur area saw prices jump by almost 69%, rising from ₹5030 per sq ft in 2019 to almost 8500 per sq ft in 2024.
NCR’s Noida Expressway saw prices increase by 66% in the last six years from ₹5067 per sq ft in 2019 to ₹8400 per sq ft in Q3 2024. Dwarka Expressway also saw average prices increase by almost 93% from ₹5359 per sq ft in 2019 to ₹10,350 per sq ft in Q3 2024.
Square Yards insights indicate that property prices will likely grow in close ranges in 2025, sustained by strong market fundamentals and demand for premium properties. Key areas near commercial hubs in major cities are expected to see sharper price increases.
Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East & Africa, CBRE also believes that the Indian real estate market is projected to exhibit moderate price appreciation in 2025.
“This anticipated growth is primarily attributable to several factors, including urban migration, increasing wealth concentration, and the entry of a growing young population into the housing market. Furthermore, economic growth and heightened investor confidence contribute to this positive outlook. However, it is crucial to acknowledge that real estate prices are subject to various influences, such as prevailing interest rates and government policies,” he said.
Slow property price growth may stimulate housing demand in 2025
Over the last couple of years, rapid urbanisation, infrastructure developments, technological applications, dynamic consumer preferences, and rising disposable income levels have largely influenced India’s residential real estate sector. These factors will continue to drive residential market growth in 2025, resulting in sustained property price increases.
However, while the post-pandemic years of 2022 and 2023 witnessed remarkable annual price growth in the range of 10-15% or even higher in the cities of Delhi NCR and Bengaluru, the rate of growth in prices has witnessed a slowdown, as was evident during H2 2024, said experts.
“Though the same trend with a lower price growth rate is likely to be witnessed in 2025, the consistent demand and quality supply from reputed developers shall continue to drive price growth. On another note, slow property price growth could create a window of opportunity for buyers and stimulate more housing demand next year, ” opines Samantak Das, Chief Economist and Executive Director – Research & REIS, JLL India.
Mudassir Zaidi, Executive Director – North at Knight Frank India, also believes that property prices will witness a slight plateauing effect in the coming year. “We are seeing a resistance to property launches that command high prices. Buyers are investing in properties only when they see value. There’s no property buying frenzy but healthy long-term demand. From now on, we do not expect a major price rise but a single-digit increase in property prices,” he said.
Demand for luxury housing is expected to continue, but primary launches in the mid and bridge-to-luxury housing segments in the ₹3 to ₹5 crore range will witness growth, he added.
