Housing prices across India rose 6% year-on-year in the first quarter of FY27, with Bengaluru and Hyderabad emerging as the strongest performers among key markets, according to a report by Kotak Institutional Equities.
The average housing price across the markets tracked by Kotak rose to around Rs 9,620 per sq ft in June 2026 from Rs 9,079 per sq ft a year earlier. While prices increased across major markets, Bengaluru and Hyderabad recorded the highest rise at 8% each.
The rise in prices comes even as India’s residential market has seen relatively modest growth in sales volumes. According to the report, all-India housing sales volumes increased 3% year-on-year in 1QFY27, while sales value grew 9%. This suggests that higher prices are playing a significant role in driving growth in the overall value of homes sold.
Among the major markets covered by Kotak, Bengaluru and Hyderabad recorded an 8% year-on-year increase in housing prices in 1QFY27.
Bengaluru also recorded a strong increase in sales volumes, with residential sales rising 20% year-on-year to 30.7 million sq ft during the quarter. Hyderabad’s sales increased 14% to 34.3 million sq ft.
The price appreciation therefore comes against a backdrop of continued demand in these two markets, although higher launches have also pushed up inventory.
MMR recorded a 3% rise in housing prices, while NCR saw a more modest 1% increase during the quarter.
The price rise is increasingly being supported by demand for better-connected locations and premium housing, according to industry executives.
“The sustained appreciation in residential prices across key markets reflects a structural shift rather than a cyclical upswing,” said Manik Malik, President & CEO, BPTP Limited.
He said homebuyers are increasingly prioritising locations with strong infrastructure, connectivity and social infrastructure, which is supporting long-term value creation.
“Markets such as Gurugram, Noida and Faridabad are benefiting from this trend, driven by continued infrastructure investments, quality developments and evolving buyer aspirations,” Malik said.
He added that improving rental yields are also indicating a balance between end-user demand and investor confidence.
While Bengaluru and Hyderabad recorded the highest price growth in Kotak’s data, developers say , particularly in premium and luxury housing.
Rishabh Periwal, Senior Vice President, Pioneer Urban Land and Infrastructure Ltd, said the growth in Gurugram is extending beyond residential property to commercial .
“What we are witnessing isn’t just price appreciation. It’s a complete development across both residential and commercial sectors,” Periwal said.
He said premium and are driving the residential market as buyers increasingly seek connected, amenity-rich projects from established brands.
Gurugram’s commercial real estate market, meanwhile, continues to benefit from demand for Grade A office space and premium retail hubs, he added.
The latest data suggests that India’s housing market is not seeing a broad-based surge in volumes alone. Prices are also becoming an increasingly important part of the growth story.
With average housing prices up 6% nationally in 1QFY27 and Bengaluru and Hyderabad recording an 8% rise, buyers in some of India’s key urban markets are having to pay significantly more than they did a year ago.
At the same time, the performance across cities remains uneven. The 8% rise in Bengaluru and Hyderabad compares with a 3% increase in MMR and just 1% in NCR, highlighting how location, infrastructure and the strength of local demand are shaping India’s housing market.
For developers, the continued price appreciation provides room for revenue growth even when sales volumes remain relatively subdued. For homebuyers, however, it means that delaying a purchase in a rapidly appreciating micro-market could come with a higher price tag later.