Summary
The National Housing Bank’s (NHB) Residential Housing Price Index (RESIDEX) report for the fourth quarter of the financial year 2024–25 reveals a significant appreciation in residential property values across India, with 48 out of 50 surveyed cities registering price increases. The composite housing price index recorded a robust year-on-year growth of 7.5%, up from 5.1% in the same quarter of the previous fiscal year, highlighting a broad-based recovery in the real estate market. This surge was particularly pronounced in major metropolitan areas such as Bengaluru, which led with a 13.1% annual increase, followed by Kolkata (9.6%) and Chennai (9.0%).
This growth has been driven by strong demand in mid-income, premium, and luxury residential segments despite prevailing high mortgage rates and elevated property prices, reflecting underlying economic resilience and evolving buyer preferences. The recent 25 basis points cut in home loan interest rates, following the Reserve Bank of India’s repo rate reduction in February 2025, is expected to further support this upward trend. The NHB RESIDEX data, based on valuation prices collected from banks and housing finance companies, underscores the critical role of financing availability in sustaining market momentum.
However, the report has sparked debate among analysts concerned about housing affordability, as rapid price increases may widen socio-economic disparities and limit access for lower- and middle-income groups, especially in major cities. Additionally, some critics question the NHB’s valuation-based methodology, suggesting it may overstate price gains by emphasizing loan-related transactions while potentially overlooking informal or distressed sales. Regional disparities also persist, with Howrah and Thiruvananthapuram being the only two cities to record price declines, challenging the notion of uniform market growth across India.
Looking forward, the property market is expected to sustain growth supported by ongoing infrastructure developments and government policies, though indirect effects from regulatory changes in related financial markets—such as recent adjustments to Futures and Options trading—pose uncertainties for investor sentiment and liquidity. Stakeholders are advised to monitor evolving economic and regulatory conditions closely to navigate the dynamic real estate landscape in the coming quarters.
Background
During the January–March quarter of the financial year 2024–25, property prices appreciated across 48 cities in India, according to the latest NHB RESIDEX data released by the National Housing Bank (NHB). This growth was reflected in the residential housing price index, which showed that all eight major metropolitan areas — Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, and Pune — experienced annual increases in residential property prices during this period. The composite housing price index, covering 50 cities and based on valuation prices collected from banks and housing finance companies, registered a year-on-year increase of 7.5% during the fourth quarter of FY25. This marked an improvement from the 5.1% increase recorded in the same quarter of the previous financial year. The NHB RESIDEX data highlights a broad-based growth trend in the Indian real estate market, reflecting stronger demand and rising property values across diverse urban centers.
Key Findings of the Q4 FY25 NHB Report
The National Housing Bank’s (NHB) latest Residential Housing Price Index (NHB RESIDEX) reveals a significant increase in property values across India during the fourth quarter of the financial year 2024-25. According to the report, residential property prices rose in 48 out of the 50 cities covered, marking a robust year-on-year growth of 7.5%, up from 5.1% in the same quarter of the previous year. Among the major metropolitan areas, Bengaluru led the growth with a 13.1% annual increase in residential prices, followed by Kolkata at 9.6%, Chennai at 9.0%, Pune at 6.8%, Ahmedabad at 6.1%, Mumbai at 5.9%, Hyderabad at 4.8%, and Delhi at 2.9%. On a quarter-on-quarter basis, the composite 50-city housing price index expanded by 1.9% during January–March 2025, continuing the upward trend observed since September 2021.
The two cities that recorded a decline in property prices were Howrah and Thiruvananthapuram, making them the exceptions in an otherwise widespread price appreciation across urban India. The data underlying the index was collected from valuation prices provided by banks and housing finance companies, indicating strong demand and valuation growth in the residential real estate sector. Despite high mortgage rates and elevated property prices, demand for residential properties surged particularly in the mid-income, premium, and luxury segments across the top eight cities, reflecting broader economic growth and societal aspirations. Additionally, a recent reduction in the home loan interest rate by 25 basis points, following the Reserve Bank of India’s repo rate cut in February 2025, may further support the housing market momentum.
Factors Influencing Property Price Growth
The significant rise in property prices across 48 out of 50 Indian cities during the January–March quarter of the financial year 2024–25 can be attributed to several interrelated factors. A key driver has been the sustained demand for residential properties, particularly in the top eight metropolitan areas—Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, and Pune—all of which recorded annual growth in property prices during this period. One important factor contributing to this trend is the growing preference among homebuyers for mid-income, premium, and luxury residential segments, which witnessed increased demand despite prevailing high mortgage rates and elevated property prices. This surge in demand reflects broader economic health and societal aspirations, as real estate sales in India reached an all-time high of Rs. 3.47 lakh crores in FY23, marking a 48% year-on-year increase.
Additionally, the housing price index compiled by the National Housing Bank is based on valuation prices collected from banks and housing finance companies, suggesting that the availability and flow of financing continue to support residential property transactions and price appreciation. Among the metros, Bengaluru led with a 13.1% year-on-year growth, followed by Kolkata at 9.6% and Chennai at 9.0%, demonstrating regional variations likely influenced by local economic conditions, infrastructure development, and buyer preferences. The continued sequential quarterly expansion of the index by 1.9% further underscores the persistent upward trajectory in property valuations across most urban centers in India.
Regional Analysis of Property Value Trends
The National Housing Bank’s (NHB) latest Residential Housing Price Index reveals a widespread appreciation in property values across India during the fourth quarter of the financial year 2024–25. Out of 50 surveyed cities, 48 registered increases in residential property prices, signaling a broad-based growth trend in the real estate sector. Among the eight major metropolitan areas, Bengaluru led the surge with a remarkable 13.1% year-on-year increase in residential prices. Kolkata followed closely with a 9.6% rise, while Chennai experienced a 9.0% growth. Pune and Ahmedabad saw gains of 6.8% and 6.1%, respectively, and Mumbai recorded a 5.9% increase. Hyderabad’s residential prices climbed by 4.8%, and Delhi reported a comparatively moderate rise of 2.9% over the same period.
On a composite level, the 50-city housing price index demonstrated a 7.5% year-on-year growth in Q4 FY25, marking an acceleration from the 5.1% recorded in the corresponding quarter of the previous year. This index is compiled based on valuation prices collected from banks and housing finance companies, providing a comprehensive overview of property value trends nationwide. Additionally, the index showed a quarter-on-quarter expansion of 1.9% during January–March 2025, continuing an upward trend that has persisted since September 2021. This steady quarterly growth reflects improving market conditions supported by monetary policy easing, as the Reserve Bank of India reduced the repo rate by 25 basis points in February 2025—the first cut in five years—leading to a moderation in home loan interest rates.
Impact of Surging Property Values
The rise in property prices across 48 out of 50 cities in India during the fourth quarter of the financial year 2024–25 has had significant implications on the real estate market and the broader economy. The 7.5% year-on-year increase in the composite housing price index, up from 5.1% in the previous year, highlights sustained growth in residential real estate values. This growth reflects robust demand, particularly in the top eight metropolitan cities—Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, and Pune—all of which recorded appreciable increases in property prices during the quarter.
The surge in property values is indicative of strong buyer confidence and underlying economic strength, despite prevailing high mortgage rates and elevated prices. Additionally, the escalating property prices have fueled foreign investment inflows into the Indian real estate sector, which have tripled to $23.9 billion between 2017 and 2021 compared to the previous five years. This influx of capital not only supports ongoing real estate development but also contributes to urban growth and infrastructure expansion.
The impact extends to societal aspirations as well, with increased sales volumes reaching record highs and signaling growing demand across mid-income, premium, and luxury housing segments in urban centers. These dynamics suggest a positive feedback loop where rising prices enhance real estate’s role as a preferred asset class, attracting more investment and stimulating economic activity. However, the rising property prices and robust market activity also place pressure on affordability, potentially limiting access for certain demographics and requiring careful policy considerations to ensure balanced growth.
Comparison with Previous Quarters and Fiscal Years
The National Housing Bank’s Housing Price Index for the last quarter of fiscal year 2024-25 revealed a significant rise in residential property prices across 48 out of 50 Indian cities, marking a 7.5% year-on-year increase. This growth represents a notable acceleration compared to the 5.1% annual increase recorded in the same quarter of the previous fiscal year. On a sequential basis, the index expanded by 1.9% during Q4 FY25, continuing a consistent upward trend that has been observed quarter-on-quarter since September 2021. The sustained growth over multiple quarters indicates a robust recovery and strengthening in the real estate market after a period of relative stagnation.
Among major metropolitan areas, Bengaluru led the growth with a 13.1% year-on-year increase in residential property prices, followed by Kolkata (9.6%) and Chennai (9.0%). Other metros such as Pune and Ahmedabad saw increases of 6.8% and 6.1%, respectively, while Mumbai recorded a 5.9% rise. This spread of growth across key urban centers underscores a broad-based demand revival rather than isolated pockets of price appreciation.
Criticisms and Controversies
Despite the National Housing Bank’s (NHB) report indicating a robust increase in property prices across 48 out of 50 cities during the fourth quarter of FY25, the findings have not been free from criticism. Some analysts have raised concerns about the potential implications of such rapid price appreciation on housing affordability, especially in major urban centers where real estate prices are already high. The sharp 7.5 percent annual increase in the Housing Price Index (HPI) may exacerbate socio-economic disparities by placing home ownership further out of reach for lower- and middle-income groups.
Moreover, the methodology behind the NHB RESIDEX index, which is based on valuation prices collected from banks and housing finance companies, has been questioned for potentially overstating price movements due to its reliance on loan-related transactions. Critics argue that this approach might not fully capture on-ground realities, such as informal property sales or distressed transactions that do not involve institutional financing.
There is also a broader controversy regarding the impact of regulatory changes in the financial markets, which indirectly affect real estate dynamics. For instance, recent measures affecting trading volumes in the Futures and Options (F&O) segment have stirred unease among investors and traders, raising questions about market stability and liquidity that could spill over into the housing finance sector. While these issues are not directly linked to the NHB report, they contribute to a climate of uncertainty surrounding property investments during this period.
Finally, two cities—Howrah and Thiruvananthapuram—recorded declines in property prices, highlighting regional disparities and challenging the narrative of uniform growth across India’s real estate markets. This variation calls for a more nuanced understanding of local factors influencing property values beyond the aggregate national trends presented by NHB.
Future Outlook and Market Predictions
The property market is expected to maintain its growth trajectory, supported by increasing demand and positive economic indicators. The National Housing Bank (NHB) report highlighting growth in 48 out of 50 cities in Q4 FY25 underscores the widespread recovery and resilience across urban real estate markets. This growth is anticipated to continue as infrastructure developments and favorable government policies stimulate both residential and commercial segments.
However, regulatory changes in related financial markets could have an indirect impact on real estate investments. Recent adjustments by the Securities and Exchange Board of India (SEBI) affecting Futures and Options (F&O) trading are projected to reduce trading volumes by up to 40% in the National Stock Exchange (NSE) options segment, potentially influencing investor sentiment and liquidity availability. Despite this, NSE’s robust revenue growth in the first half of FY25, despite significant one-time expenses related to regulatory compliance, reflects the market’s underlying strength and adaptability.
Looking ahead, the interplay between regulatory frameworks and market dynamics will be crucial. Sustained growth in property values alongside stable financial market conditions could bolster investor confidence and drive further expansion. Stakeholders are advised to closely monitor evolving regulations and economic signals to navigate the upcoming quarters effectively.
