India’s residential real estate market has quietly outpaced the stock markets over the past year, delivering an impressive 15% total return across major cities. According to the 1 Finance Housing Total Return Index, the measure climbed from 228 in September 2024 to 263 in September 2025, highlighting renewed investor and buyer confidence in urban housing markets. Analysts point to infrastructure development as the key engine powering this growth, reshaping neighborhoods and linking peripheral areas to the heart of the city.
Rising Prices Across Top Cities
Greater Mumbai remains the country’s priciest residential hub, with average rates at ₹33,762 per sq. ft. Pune, meanwhile, continues to see elevated unsold inventory, standing at 2,69,348 units, while Hyderabad recorded a 12% rise in its average per sq. ft. rate to ₹9,100. The city’s Regional Ring Road, expected to enhance connectivity between districts and across Hyderabad, is credited with attracting homebuyers to previously underdeveloped areas.
Delhi NCR presents an interesting contrast. While unsold inventory is high, nearly 60% of it is older than five years, suggesting a buyer preference shift toward newly launched, premium apartments equipped with modern amenities. The message is clear: location, connectivity, and facilities now dominate purchasing decisions, more than sheer quantity of available units.
Infrastructure Driving Demand
Urban infrastructure projects are playing a decisive role in reshaping India’s housing market. Improved transport links are connecting residential hubs to commercial centers, making peripheral areas more attractive to buyers and investors alike.
Bengaluru provides a compelling example. The ongoing Namma Metro expansion, Yellow Line operational and Blue Line expected by 2026 is easing congestion along the city’s tech corridor. This connectivity boost has fueled a remarkable 24% growth in Greater Bengaluru’s residential market, linking commercial hotspots to affordable housing and creating a broader, more accessible residential footprint.
Similarly, Hyderabad’s Regional Ring Road, with its northern phase completed and southern phase set for early 2026, is establishing a key logistics corridor for Pharma City. The improved transport infrastructure has unlocked significant residential demand in the city’s peripheries, translating infrastructure investment directly into real estate growth.
Greater Mumbai’s Aqua Line Metro, connecting Aarey JVLR to Cuffe Parade, is supporting a 13% price appreciation in the central suburbs, where rates now hover around ₹40,735 per sq. ft. The pattern is clear: housing markets are responding not just to demand, but to the value created by better urban connectivity.
Expert Perspective
Mr. Animesh Hardia, Senior Vice President of Quantitative Research at 1 Finance, explains, “Real estate is perhaps the most misunderstood asset class in India. Its drivers of value are often overlooked because on-ground intelligence is limited. Social media narratives frequently misrepresent returns by comparing the top 50 listed companies with the entire real estate market. That’s flawed. Just as certain companies are fundamentally strong, so too are certain localities in real estate. A proper assessment requires understanding employment trends, commercial developments, public infrastructure, and traffic flows.”
Hardia’s observation underscores a central point: buyers and investors increasingly recognize that real estate performance hinges on location-specific fundamentals rather than broad market trends.
Market Outlook
Despite rising unsold inventory, over 11 lakh units across the top eight cities, the residential market has not slowed. Infrastructure projects are bridging the gap between peripheral housing and commercial hubs, making properties outside city centers increasingly viable for homebuyers and investors. While some regions may experience tempered near-term appreciation due to elevated supply, the broader market remains buoyed by infrastructure-led growth and sustained demand for well-connected homes.
From Greater Mumbai to Hyderabad and Bengaluru, the message is consistent: India’s residential real estate is no longer just a passive asset. It is a market increasingly shaped by strategic urban planning, transport upgrades, and a shift in buyer priorities toward convenience, connectivity, and lifestyle.
As infrastructure continues to expand and peripheral areas become increasingly integrated with city centers, the country’s housing markets are poised to deliver sustained returns. For investors and homebuyers alike, the lesson is clear: in India’s evolving cities, connectivity is king, and real estate is its crown jewel.
