India's Rich Driving Premium Property Boom, Sales In Affordable Segment Weak: Report
While home prices are rising across most urban hubs, Delhi-NCR is leading the charge, the report shows.
India's mega cities are witnessing an inordinate boom in housing prices, with the number of high-net-worth individuals and ultra-high-net-worth individual growing 12% and hiking demand for premium properties, as per a report released by Housing.com and the Indian School of Business.
India's real estate prices have firmed up, with All-India Housing Price Index rising by four points in December 2024, it said. However, the trend is not uniform—high-end properties are flying off the shelves, while sales in the affordable segment are weakening.
While home prices are rising across most urban hubs, the Delhi-National Capital Region is leading the charge with a reading of 195 points—the highest in the country. The surge is fueled by major infrastructure investments and an influx of high-income buyers. Micro-markets like Dwarka Expressway, Sohna, and Noida Extension are emerging as prime investment hotspots, added the report.
Meanwhile, the report details how tech-driven cities like Bengaluru and Hyderabad—India's IT powerhouses—have also witnessed steady growth in property prices, riding on the back of expanding commercial prospects and rising salaries in the technology sector.
The latest data as per the report suggests that Indians are increasingly favouring spacious homes, with the demand for 3BHK properties rising sharply. The All-India configuration-wise HPI for 3BHK homes hit 141 points, reflecting a 11-point jump since January 2024.
On the other hand, the report details how compact homes are struggling to attract buyers. The index for 1BHK units fell to 117 from 123 in the same period, indicating declining sales in the budget housing segment.
Notably, the index is a joint initiative by ISB and Housing.com, which is an online real estate advisory platform.
"The 3BHK segment continues to show steady price appreciation, driven by sustained demand for larger homes," said Shekhar Tomar, assistant professor of economics and public policy at ISB. "Meanwhile, the sluggish demand for 1BHKs suggests either a shift in buyer preferences or a weakening interest from budget-conscious homebuyers."
Surging land and construction costs are making it harder for middle-income buyers to enter the housing market, despite government measures like tax breaks and interest rate cuts.
"The firming up of property prices tells a story of growth and affluence for the world’s fifth-largest economy. However, it also underscores the burden on India’s middle class," said Dhruv Agarwala, group chief executive officer of Housing.com & PropTiger.com.
