India’s picturesque hill towns are once again on the real estate radar. The latest Magicbricks report shows that housing demand in hill destinations climbed 8.2% year-on-year (YoY) during July–September 2025, driven by a mix of lifestyle aspirations, improved connectivity, and steady rental income opportunities.
The findings reveal that Ooty, Rishikesh, and Dharamshala are leading this growth wave, emerging as top choices for both investors and homebuyers seeking calm, clean air, and better work–life balance. Meanwhile, traditional favourites such as Dehradun, Manali, and Mussoorie have recorded the sharpest price gains, 30.9%, 18.1%, and 11.1% respectively, reflecting a revival in premium second-home demand.
Across major hill markets, property prices rose an average of 10.3% YoY. Dharamshala remains one of the most affordable with an average rate of Rs. 5,800 per sq. ft, while Lonavala continues to command the highest prices at around Rs. 12,700 per sq. ft.
Home in the Hills, Demand in the Details
The pandemic-era trend of remote work ignited new interest in second homes, and that spark hasn’t faded. Even as supply dipped marginally by 1.2% YoY, the Rs. 30 lakh - Rs.1 crore price bracket accounted for nearly 70% of overall demand, signalling that mid-segment buyers continue to drive the market.
Independent houses and residential plots dominate preferences across most destinations, reflecting a desire for space and privacy. Villas, however, are seeing strong traction in Lonavala, where 72% of buyers are seeking such properties, followed by Ooty at 31%.
Industry experts say these numbers indicate a maturing of the hill property segment, from being driven by occasional luxury buyers to becoming a structured market that serves both end-users and investors. “The hill market has transitioned from seasonal interest to sustained demand,” the report notes, adding that improved road and air connectivity has made many hill towns more accessible for weekend or work-from-anywhere living.
Rising Rentals Add to Investor Appeal
The rental housing segment is also making a robust comeback. Shimla, Mussoorie, and Rishikesh have seen the biggest jumps in rental demand which is up by 43%, 31%, and 16% respectively. With growing interest in short-stay homes and vacation rentals, hill stations are attracting a new breed of investor looking to tap into the steady flow of tourists and digital nomads.
Rental yields are among the highest in the country’s leisure markets, led by Shimla (4.72%), Nainital (3.87%), and Dharamshala (3.69%). “These yields, combined with moderate price points, offer a strong investment case,” the report says, highlighting that hill homes are now balancing lifestyle appeal with solid financial returns.
Hill Markets Outpace Metros in Demand Growth
While India’s top 13 Tier-1 cities saw housing demand rise 6.4% and prices jump 21.1% year-on-year, hill markets outperformed on the demand front with an 8.2% increase. Analysts attribute this to evolving consumer preferences, where buyers increasingly prioritise wellness, sustainability, and a slower pace of life.
The relative affordability of hill destinations, where price appreciation remains moderate compared to metros has also made them attractive for first-time investors. “For many, it’s a way to diversify property portfolios while securing a home that doubles as a holiday retreat,” said a senior property consultant.
From Retreats to Residences
What was once a niche segment for second homes is fast becoming part of the mainstream housing conversation. As infrastructure improves and digital connectivity deepens, more Indians are looking beyond the plains for their next property purchase. Whether for weekend escapes or full-time living, the pull of the hills is stronger than ever, quietly reshaping India’s real estate landscape.
