Homes beat stocks: India's housing market delivers 15% return in 2025

Real Estate Wins the Race: Data Shows Housing Outsmarted the Stock Market

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India’s residential real estate market has quietly outperformed equities over the past year, delivering a 15% total return across major cities—higher than the Nifty 50’s one-year performance—according to findings from the 1 Finance Housing Total Return Index (TRI), which rose from 228 in September 2024 to 263 in September 2025. 

 

 

The surge, the study said, is driven not by speculation but by infrastructure build-out, which has rapidly reshaped connectivity in Tier-I cities and pushed up both prices and demand in peripheral micro-markets.

 

"The surge in residential prices is directly linked to infrastructure projects reshaping urban connectivity. As cities expand their commercial footprint, new infrastructure is bridging the gap between development and accessibility, transforming peripheral areas into prime residential hubs," noted the report.  

 

The Impact is Visible Across Major Cities:

 Bengaluru: The Namma Metro Phase 2 Yellow line is already operational, and Blue line operational by 2026, are set to decongest the tech corridor. This upcoming connectivity is a primary factor behind the 24% growth in Greater Bengaluru, linking commercial hubs to affordable housing.

 

Hyderabad: Northern phase completion and Southern phase construction starting by early 2026, the Regional Ring Road establishes a critical logistics artery for Pharma City. This enhanced connectivity has simultaneously unlocked the region's residential potential, driving significant demand for housing in the periphery.

 

Greater Mumbai: The Aqua Line Metro, linking Aarey JVLR to Cuffe Parade, anchors 13% growth in the Central Suburbs, with a rate of ₹40,735 per sq. ft.

 

The 1 Finance Housing TRI is positioned as India’s first unbiased, transaction-driven housing return index, built using real RERA-registered transaction data. It combines per sq. ft. pricing, rental yields, and population weights to provide a holistic picture of housing market performance 

 

For investors looking to compare long-term wealth-building assets, the index offers a rigorous benchmark—one that challenges the belief that equities significantly outperform property over time.

 

Momentum Across Cities

 

The report highlights robust activity in Q3 2025:

 

• Sales value hit ₹1.52 lakh crore.
• Greater Mumbai remains India’s costliest market at ₹33,762 per sq ft.
• Pune’s unsold inventory stands at 2.69 lakh units, indicating a supply overhang.
• Hyderabad prices rose 12% YoY to ₹9,100 per sq ft, boosted by the Regional Ring Road (RRR).
• In Delhi NCR, 60% of unsold stock is over 5 years old, revealing buyer preference for premium new launches

 

"Real estate stands as the most misunderstood asset class. Its drivers of value are not well recognised, because on-ground intelligence is missing. Additionally, social media narratives portray it in a bad light using inaccurate comparisons, like comparing returns of top 50 companies of India with the entire real estate market. That's flawed. Just like the top 50 are fundamentally strong companies, there are localities that have strong real estate fundamentals. What needs to be studied are employment trends, commercial, social and public infrastructure, and traffic patterns. Without that study, any recommendation on real estate is half-baked," said Animesh Hardia, Senior Vice President of Quantitative Research at 1 Finance.

 

Infrastructure development is successfully bridging the gap between homes located on city outskirts and commercial spaces within or across the city, making these peripheral properties increasingly attractive to buyers. While elevated supply in select regions may temper near-term appreciation, the broader market continues to be anchored by home buyers’ demand and infrastructure-led growth.