India's real estate market is experiencing a significant boom, particularly in the multistorey apartment sector. Property prices have risen sharply in recent years, making homeownership increasingly challenging for many, while rental costs have also surged, impacting affordability in urban centers.

Surging Apartment Prices

Over the past five years, apartment prices in India have witnessed substantial growth. While specific numbers may vary depending on the source and region, the overall trend indicates a significant increase in property values. For example, one report noted that residential prices across India's top seven cities rose 11% year-on-year between Q2 2024 and Q2 2025. In certain micro-markets, such as Thane in the Mumbai Metropolitan Region, prices have jumped as much as 46% in just three years. On Gurugram's Golf Course Extension Road, new-launch rates have climbed from approximately ₹8,800 per sq ft in 2019 to over ₹20,000 in 2024.

A Reuters poll of property analysts predicts that average home prices will increase by 6.3% in 2025 and 7.0% in 2026, exceeding earlier estimates. This rapid escalation in prices can be attributed to several factors, including strong demand, rising incomes, and renewed investor interest. The luxury housing segment is a key driver of this price increase, with demand for high-end properties remaining robust.

Soaring Rental Costs

As home prices continue to rise, many individuals and families are being priced out of the ownership market and are turning to rentals. This increased demand for rental properties has led to a corresponding surge in rental costs. While the exact figures vary, rental rates in urban areas are rising faster than consumer inflation. Some reports suggest that average urban rents are expected to rise by 5% to 8% over the coming year.

Affordability Challenges

The combined effect of rising apartment prices and surging rental costs is creating significant affordability challenges for many Indians, especially those in the middle and lower-income segments. Stagnant disposable incomes are making it difficult for people to save for a down payment or afford monthly mortgage payments. As a result, many are being forced to postpone their homeownership dreams and remain in the rental market.

Factors Driving the Market

Several factors are contributing to the boom in India's multistorey apartment market:

• Strong Demand: India's robust economy, rising incomes, and increasing urbanization are fueling demand for housing, particularly in major cities.
• Luxury Housing Demand: The demand for luxury homes remains strong, driving up prices in the premium segment.
• Infrastructure Development: Infrastructure upgrades, such as new metro lines and expressways, are improving connectivity and driving demand in previously less accessible areas.
• Investor Confidence: Renewed investor interest in the Indian real estate market is further boosting prices.

Impact and Concerns

While the growth in the real estate market is generally seen as positive, there are also concerns about its impact on affordability and social equity:

• Affordable Housing Shortage: A shortage of affordable homes is worsening, leaving many people with limited housing options.
• Rising Inequality: The focus on luxury housing may exacerbate inequality, as the benefits of the real estate boom are not evenly distributed.
• Pressure on Civic Services: Rapid development can put pressure on existing civic services, such as water supply, sanitation, and transportation.

Future Outlook

Experts predict that home prices in India will continue to rise in the coming years, driven by strong demand and limited supply. While interest rate cuts by the Reserve Bank of India may provide some relief, the overall affordability challenges are likely to persist. To address these challenges, there is a need for policies that promote the development of affordable housing, encourage sustainable urban development, and ensure equitable access to housing for all segments of society.