Bengaluru Sees 79% Spike in Housing Prices in 5 Years; Mumbai Remains Costliest Market

Residential property prices across major Indian cities have surged 48% on average over the last five years, with Bengaluru leading the charge at a staggering 79% rise, according to the latest 1 Finance Housing Total Return Index (TRI).

The index, which reflects total returns using per square foot (PSF) rates, rental yields, and city populations, jumped from 167 in 2020 to 247 in 2025 signaling a strong phase in the country’s housing cycle.

Bengaluru’s performance highlights its sustained appeal as a residential destination even as Mumbai remains India’s priciest housing market with average PSF levels peaking at ₹26,975. While Pune builders tempered new launches by 20% in a cautious reaction to demand, Hyderabad registered a 177% increase in unsold stock, indicating a broad supply glut.

Delhi-NCR, on the other hand, posted a 30% drop in unsold stock, highlighting healthy buyer interest. Chennai reported a mixed trend — with new supply growing 51% but sales rising just 10%, suggesting a mismatch between availability and absorption. Meanwhile, both launches and sales in Kolkata shrank by 29%, indicating market contraction.

New home launches across the top cities grew 10% between 2020 and 2025, while sales increased 33%, showing demand outpaced supply. Even with a 32% rise in unsold units, prices climbed steadily, reinforcing long-term market confidence.

Animesh Hardia, SVP of Quantitative Research at 1 Finance, noted a growing divide in buyer sentiment. “Existing homeowners are benefiting from price gains, while potential buyers face uncertainty — worried about buying at peak rates yet anxious about missing out,” he said. He stressed the importance of sound financial guidance amid emotional decisions and market hype.

Though the post-COVID price growth may not continue with the same impetus as before, experts foresee solid appreciation driven by robust demand and government-subsidized infrastructure spending. As cities grow and connectivity improves, fresh growth corridors are unfolding particularly in the peri-urban zones around India’s metro centers.