Real estate prices surged 48% in 5 years — but has the boom peaked?

India’s housing market has witnessed an extraordinary surge, with prices across major cities climbing 48% over the past five years, according to the 1 Finance Housing Total Return Index. This raises a critical question for potential buyers and investors: Have property prices already peaked, or is there more steam left in the rally?

The index, which tracks real-time data from RERA-registered residential transactions, rose from 167 in 2020 to 247 in 2025. It reflects a strong post-COVID recovery phase driven by increased demand, infrastructure growth, and shifting buyer preferences.

City-wise snapshots: a mixed bag

Bengaluru has seen a blistering 79% price rise — the highest among metro cities.

Mumbai is now India’s costliest residential market with an average price of ₹26,975 per sq ft.

Hyderabad, despite booming development, faces a supply glut with unsold inventory up 177%.

Delhi NCR presents a contrasting picture with a 30% decline in unsold inventory, signalling high demand.

Chennai is seeing an imbalance — launches up 51% but sales growing just 10%.

Pune developers have scaled back new launches by 20% in response to market conditions.

Kolkata remains subdued with a 29% dip in both launches and sales.

Despite a 32% increase in unsold homes nationally, sales have grown 33% while new launches rose by only 10% between 2020 and 2025 — indicating stronger demand growth than supply.

Experts weigh in
Animesh Hardia, Senior VP – Quantitative Research at 1 Finance, notes that current market sentiment is split. “Existing homeowners are sitting on appreciated assets, but potential buyers are torn between FOMO and fear of buying at the top. It’s leading to impulsive, emotionally driven purchases,” he said. His advice: work with both real estate experts and financial advisors to make data-informed decisions — not ones based on hype or family pressure.

Has the peak arrived?
According to 1 Finance, prices are unlikely to repeat their post-COVID surge, but that doesn’t mean the rally is over. With rising infrastructure investments and better connectivity across Tier 1 cities and their peripheries, the market is transitioning from boom to balance.

Conclusion: Property prices may not have peaked yet — but going forward, expect steadier, more sustainable growth. For homebuyers, that means it’s not just about timing the market but aligning purchases with long-term personal and financial goals.