The average price of newly launched residential projects in India’s top 10 cities has surged by a staggering 88 per cent over the past five years, according to a report by real estate data analytics firm PropEquity released on Monday.

Gurugram witnessed the most dramatic price growth, with average prices catapulting by 160% from Rs 7,500 per sq ft in 2019 to Rs 19,500 per sq ft in 2024. In contrast, Mumbai experienced the lowest increase at 37%, with prices rising from Rs 25,820 per sq ft to Rs 35,500 per sq ft during the same period.

Following Gurugram in terms of price growth are Noida (146%), Bengaluru (98%), Hyderabad (81%), Chennai (80%), Pune (73%), Navi Mumbai (69%), Kolkata (68%), Thane (66%), and finally Mumbai.

The report analysed 15,000 new launch projects comprising apartments, floors, and villas across the top 10 cities: Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Thane, Navi Mumbai, Pune, Noida, and Gurugram.

“Real estate prices have escalated exponentially across all major cities in the last five years,” explains Samir Jasuja, Founder & CEO of PropEquity. “The massive infrastructure development, growing interest from NRIs, HNIs/UHNIs and stock market gainers looking to create wealth and generate income through real estate investment, rising homeownership sentiments and overall shift towards luxury/super luxury homes as a result of rising aspiration and affluence are the contributing factors for such a steep rise.”

Despite experiencing the lowest price increase, Mumbai remains the most expensive city with an average price of Rs 35,500 per sq ft. Gurugram follows at Rs 19,500 per sq ft, and Noida at Rs 16,000 per sq ft.

The data further reveals a significant shift in the affordability landscape. In 2019, only Mumbai boasted average new launch prices exceeding Rs 10,000 per sq ft. However, by 2024, all cities except Hyderabad, Chennai, and Kolkata crossed this threshold, highlighting the growing demand and shrinking affordability in India’s prime real estate markets.

What Real Estate Developers Say?

Shiwang Suraj, founder and director of Gurugram-based property consulting firm InfraMantra, said, “The housing market has seen remarkable growth over the past five years, with top cities experiencing an overall surge in prices. Gurugram leads the way with a staggering 160% increase, while Mumbai shows a steady rise of 37%. This trend reflects the strong demand from both investors and homebuyers, highlighting the attractiveness of these urban centers.”

While there are discussions about the investor-driven nature of the market, this growth also signals confidence in the real estate sector’s potential. As these cities evolve, there’s an opportunity for innovative solutions to ensure accessibility for homebuyers, fostering a vibrant and diverse housing landscape, he added.

Stating that Gurugram has today risen to become one of the costliest real estate markets in India, Sanju Bhadana, MD of 4S Developers, said, “The city has been setting benchmarks in luxury and super luxury homes and is among the few cities that have seen price of homes double in the last 5 years. Post-pandemic, the Gurugram market has seen price escalation in all its micro-markets as demand swelled up from not just local inhabitants but also wealthy individuals from other parts of India and world. The coming years is expected to see a similar trend.”

Srinivasan Gopalan, CEO of Arisinfra Solutions Ltd, said, “In Q3, the real estate market faced challenges due to delayed project launches, the monsoon season, and the Shraad period, leading to a supply-demand imbalance. Despite this, strong demand from end users has driven a noticeable increase in sales from serious buyers. This upward momentum is anticipated to persist as the real estate sector continues to grow, fuelled by rising corporate activity and an increasing need for quality housing.”

Significantly, there has been a shift in the market, with luxury and mid-segment homes priced at INR 3 crore and above seeing significant quarter-on-quarter sales growth. New supply fell below one lakh units for the first time since Q1 2023, while Q3 2024 sales outpaced launches, a highly positive sign, Gopalan added.