Business · India Bureau
Housing costs surge as property prices outpace construction expenses
Residential property values have climbed 59% between 2021 and 2025, significantly outstripping the 34% rise in construction costs during the same period, according to recent data. The widening gap points to affordability challenges in India's housing market.
LSN India ·
Property prices across India's residential sector have surged 59% over the four-year period from 2021 to 2025, far exceeding the growth in underlying construction expenses, new figures reveal.
During the same timeframe, construction costs rose 34%, creating a notable divergence between input costs and market valuations. The disparity suggests that factors beyond material and labour expenses are driving residential property inflation, including strong demand, limited supply, and investor interest in real estate.
The faster appreciation of housing values compared to construction outlays has raised concerns about affordability for homebuyers across major markets. Middle-income households face mounting pressure to enter the property market as prices climb at nearly double the rate of construction cost increases.
Industry analysts attribute the divergence to multiple factors, including elevated land costs, regulatory fees, and speculative investment activity. The gap underscores the complex dynamics reshaping India's real estate sector amid sustained urbanisation and migration pressures.