Questions worth asking

Between 2021 and 2025, residential housing prices across India’s top seven cities increased by 59 percent, significantly outstripping a 34 percent rise in construction costs during the same period. According to research from real estate firm Anarock, escalating land values served as the primary catalyst for the steep rise in property prices. During this timeframe, average construction costs increased from Rs 2,681 per square foot in 2021 to Rs 3,604 per square foot in 2025, reflecting a 6.9 percent compound annual growth rate. Additionally, geopolitical conflicts in West Asia have put further pressure on developers, adding an estimated 8 to 10 percent to construction costs due to rising steel prices and fuel-linked logistics expenses.

India's housing market showed a strong recovery in early 2026, but the gains were concentrated in higher-priced homes. Housing prices across seven major cities rose 8-20% year-on-year in Q1 2026, while residential sales increased 8% to 70,631 units after falling the previous year. However, properties above Rs 1 crore recorded 30% growth, with the Rs 1.5-3 crore segment rising 67%, while sales of homes below Rs 1 crore fell 24%. The RBI's House Price Index rose 3.58% year-on-year in Q3 2025-26. Industry figures also indicate that prices are increasing faster than incomes, while rents remain elevated, potentially keeping more households in rental housing for longer.