India’s Home Prices Set to Rise Sharply, Rentals Also Climb

16 Sep 2025 CW Team

The survey of 20 analysts, conducted between 14 August and 12 September, found that average home prices — already more than double over the past decade — are expected to rise 6.3 per cent in 2025 and 7 per cent in 2026, after an estimated 4 per cent increase in 2024. This outlook is higher than the 6 per cent and 5 per cent increases predicted in June and reflects housing trends in major cities.

India’s rapid economic growth of 7.8 per cent in the last quarter has not translated into broader income gains. Experts said well-paying jobs remain concentrated in a few metros, while wages for many have stagnated, keeping home ownership out of reach. “The current problem is strong macro numbers have not benefited the population at the lower side of the pyramid and they are at a disadvantage,” said Ajay Sharma, managing director of Valuation Services at Colliers.

As a result, many urban residents are turning to rentals, further driving up rates. Median forecasts suggest average urban rents will rise by 5 to 8 per cent over the next year, outpacing consumer inflation.

Affordability remains uncertain. Out of 19 analysts, 10 said it may improve, while nine expected it to worsen — a reversal from June when most foresaw improvement. The Reserve Bank of India has cut its key interest rate by 100 basis points to 5.50 per cent this year, but experts said easing has done little to improve affordability.

India faces an estimated shortfall of 10 million affordable homes, with Knight Frank projecting the gap could triple by 2030. Experts warn that worsening inequality in housing could have long-term social and economic effects.

Pankaj Kapoor of Liases Foras noted that affordability has deteriorated since financialisation in real estate. “We have worsened it to the point where the qualifying age to purchase a property has risen from around 30 to 40 years to 45 years old,” he said. He added, “Crony capitalism starts with land ownership. So how can cities, where the rich control the land, create affordable housing? That’s why housing doesn’t give you choices — it gives you frustrated options.”

Home prices in India are projected to rise more steeply than earlier forecasts, fuelled by demand from wealthy buyers, while the shortage of affordable housing is worsening and pushing millions towards costly rentals, according to a Reuters poll of property experts.The survey of 20 analysts, conducted between 14 August and 12 September, found that average home prices — already more than double over the past decade — are expected to rise 6.3 per cent in 2025 and 7 per cent in 2026, after an estimated 4 per cent increase in 2024. This outlook is higher than the 6 per cent and 5 per cent increases predicted in June and reflects housing trends in major cities.India’s rapid economic growth of 7.8 per cent in the last quarter has not translated into broader income gains. Experts said well-paying jobs remain concentrated in a few metros, while wages for many have stagnated, keeping home ownership out of reach. “The current problem is strong macro numbers have not benefited the population at the lower side of the pyramid and they are at a disadvantage,” said Ajay Sharma, managing director of Valuation Services at Colliers.As a result, many urban residents are turning to rentals, further driving up rates. Median forecasts suggest average urban rents will rise by 5 to 8 per cent over the next year, outpacing consumer inflation.Affordability remains uncertain. Out of 19 analysts, 10 said it may improve, while nine expected it to worsen — a reversal from June when most foresaw improvement. The Reserve Bank of India has cut its key interest rate by 100 basis points to 5.50 per cent this year, but experts said easing has done little to improve affordability.India faces an estimated shortfall of 10 million affordable homes, with Knight Frank projecting the gap could triple by 2030. Experts warn that worsening inequality in housing could have long-term social and economic effects.Pankaj Kapoor of Liases Foras noted that affordability has deteriorated since financialisation in real estate. “We have worsened it to the point where the qualifying age to purchase a property has risen from around 30 to 40 years to 45 years old,” he said. He added, “Crony capitalism starts with land ownership. So how can cities, where the rich control the land, create affordable housing? That’s why housing doesn’t give you choices — it gives you frustrated options.”

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