16 - 09 - 2026

India Housing Price Index growth moderates to 3.6% in Q1FY27

India’s Housing Price Index (HPI) rose at a slower pace of 3.6 per cent in the first quarter of FY27 (Q1FY27), compared with a 4.5 per cent growth in the sequential fourth quarter of last fiscal.

The index, published by the Reserve Bank of India (RBI), said HPI grew at the same pace as it did back in Q1FY26.

The top cities that contributed to growth in Q1 included Chandigarh (49.6 per cent), Jaipur (36.4 per cent), Kanpur (27.5 per cent), Lucknow (17.7 per cent) and Thiruvanthapuram (16.3 per cent), according to a commentary by Bank of Baroda.

“The aftermath of the West Asia conflict weighed on global growth as it pushed commodity prices higher and disrupted supply chains. In India too, inflation surged in Q1. The impact of higher inflation was noted across industries. Despite this, HPI rose at similar pace as last year signalling stability. The study captures how each of the variables, such as HPI, inflation and sectoral credit, has performed during this time frame,” Jahnavi Prabhakar Economist at Bank of Baroda said.

The price appreciation in Chandigarh is due to recent revision in the collector rate, applicable from April 1, 2026. Additionally, unavailability of new land pockets has also pushed prices higher in recent times.

On the other hand, cities such as Delhi (-1.2 per cent), Kolkata (-31.5 per cent), Mumbai (2.8 per cent) and Hyderabad (-0.8 per cent) posted decline or grew at a much slower pace in Q1. The residential real estate in Tier-II cities is driving the market demand rather than the big cities, supported by increased connectivity and growing service-based employment opportunities.

On a QoQ basis, HPI has registered 1.1 per cent growth in Q1 against 0.5 per cent growth noted in Q4 and 2 per cent growth in Q1. The pace of price appreciation has been relatively modest with cities such as Chandigarh (23.6 per cent from -10.2 per cent in Q4FY26), Thiruvanthapuram (8.8 per cent from -5.2 per cent in Q4FY26), Hyderabad (3.7 per cent from -1.4 per cent in Q4FY26) contributing the most for Q1 price rise.

On the other hand, cities such as Nagpur (-14.8 per cent from 3.2 per cent), Pune (-3.7 per cent from 3.9 per cent) and Jaipur (2.5 per cent from 9.2 per cent) registered the highest moderation for the same period.

Banking clocks 18.6% growth

Credit to housing sector continued to expand at a steady pace of 11 per cent in Q1 against 11.5 per cent growth in Q4 and was higher than 9.6 per cent growth in Q1. India’s banking sector has grown at healthy pace, clocking double digit growth of 18.6 per cent in Q1, despite the economy facing unprecedented challenges on account of the West Asia conflict.

As per the new base year, Consumer Price Index (CPI) inflation rose by 3.9 per cent in Q1 against 3.1 per cent in Q4 and was even higher than 2.9 per cent increase noted in Q1. The weightage of housing is divided between actual rent payment which a weight of 10.9 per cent and maintenance, repair of dwelling has the weight of 1.2 per cent in the estimation of CPI.

For the same period, inflation of actual rent has inched up marginally by 0.6 per cent in Q1 from 0.5 per cent in both Q4 and Q1. On the other hand, inflation print for maintenance repair and security of dwelling has edged up tad bit with 0.9 per cent in Q1 from 0.7 per cent in Q4, while it has moderated down from 1 per cent back in Q1.

A substantial part of the increase in housing prices has been on account of higher construction cost while external pressures such as growing land costs, supply-demand functioning along with high developer margins, marginally impact the price rise. Globally, raw material prices remained volatile during this period with commodity prices elevated in Q1, crude prices surged by 45 per cent, aluminium, copper and iron ore all accelerated by 46 per cent, 10.1 per cent and 40 per cent respectively for the same period.

Even international price of coking coal during this period rose by 29.5 per cent. As a result, the same was percolated in higher domestic prices noted for iron ore along with steel.

Some cities on an annual and quarterly basis, both have registered strong price gains in Q1 with the likes of Chandigarh and Thiruvananthapuram, standing as clear winners. In contrast, subdued price action has been noted for cities such as Kolkata which has registered deflation in the last few quarters on an annual basis, followed by Nagpur and Pune.

Notably, CPI for Q1 was higher given the higher commodity prices, freight expenses, gas shortages and supply chain bottlenecks due to escalated geopolitical tensions. Housing inflation also inched up due to higher input cost during the same period. Notwithstanding these challenges, housing credit also rose at a steady pace during the same period, suggesting underlying demand.

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