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The moderation in India’s house price growth suggests a potential cooling of the residential property market. While still in positive territory, the deceleration from 4.5% to 3.6% year-on-year could reflect a combination of factors such as rising interest rates, potential affordability constraints for buyers, and a stabilization after a period of strong appreciation. The consistent year-on-year growth in specific Tier 2 and Tier 3 cities highlights localized market dynamics. Investors and developers may need to monitor these trends closely, as sustained moderation could impact real estate investment returns and construction activity.
India’s residential property price growth decelerated to 3.6% year-on-year in the first quarter of the current financial year, down from 4.5% in the preceding quarter, according to data released by the Reserve Bank of India (RBI) on Monday.
The All-India House Price Index (HPI) reached 117.5 in Q1 FY27, marking a 1.1% increase from the fourth quarter of FY26. The index stood at 116.2 in Q4 FY26 and 113.4 in Q1 FY26.
The central bank stated that the 3.6% annual growth in the HPI for Q1 FY27 was consistent with the same period of the previous fiscal year. This growth was primarily driven by cities including Chandigarh, Jaipur, Kanpur, Lucknow, and Thiruvananthapuram.
While the annual pace of house price increases eased from the previous quarter, the latest growth rate remained unchanged compared to the corresponding quarter of the prior financial year. On a quarter-on-quarter basis, the All-India HPI saw a 1.1% rise.
The RBI compiles the HPI quarterly using transaction-level data from property registration authorities. The index, with 2022-23 as its base year, covers 18 major Indian cities: Mumbai, Delhi, Chennai, Kolkata, Bengaluru, Lucknow, Ahmedabad, Jaipur, Kanpur, Kochi, Hyderabad, Thiruvananthapuram, Pune, Ghaziabad, Thane, Gautam Buddha Nagar, Chandigarh, and Nagpur.
The data indicates that although house prices continued to appreciate across the covered cities, the overall rate of annual price escalation moderated in the June quarter compared to the March quarter.
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