Urban Real Estate Prices in India Plummeting During Covid-19

As COVID-19 pushes residential real estate values downward across India, data suggests that demand may be shifting from urban centres to outer areas.

As the world's fifth-largest economy in 2019, India was on pace to rank even higher in 2020 until the coronavirus pandemic led to its gross domestic product (GDP) contracting by approximately 24%. The fallout extended to the country's residential real estate market, which has been struggling since the end of 2019. As coronavirus spread across the nation, the demand for real estate fell by 40% overall. But is every real estate market in India impacted the same way by the pandemic? Our analysis of data suggests that there's more to this trend as consumers may be looking to move away from urban centers.

Key Findings

  • Covid-19 has led to significant drops in residential real estate price over the course of 2020. However, real estate prices have been hit the most in India's urban centers, with Mumbai's central neighborhoods falling 7% Vs 1% for the whole city.
  • This migration from urban centers to outer areas is closely tied to consumers avoiding expensive, populous areas, with cities with larger and denser population seeing bigger downturns in their real estate market.
  • In contrast, "outer" cities like Thane and Gurugram with lower population actually saw an increase of real estate prices of about 0.5%.
  • Economic indicators like mass migrations out of urban areas & similar trends in other global cities like Singapore, Seoul, Hong Kong and New York suggest that this shift away from urban areas may continue until COVID-19 is no longer a problem in the country

COVID-19 Having an Outsized Impact on Real Estate in India's Largest Urban Centers

While real estate values in India's leading cities have dropped dramatically since the start of the pandemic, a close look at the numbers suggests that neighborhoods closest to the urban center have suffered even more dramatically during COVID-19. For example, Mumbai saw a real estate price decline of 3% since December of 2019. However, in localities like the Central Area, Nepeansea Road and Matunga West saw their real estate prices fall by 5.5-12% from Q1 to Q3 of 2020. In a stark contrast, in outer areas like Sarvodaya Nagar, residential real estate prices actually increased by 14.5% within the same time frame.

Graph showing Different Locality Price Averages in Mumbai

The trend remains true with other major cities like New Delhi, Bangalore and Chennai.

For example, Kirti Nagar and Tilak nagar, localities near central New Delhi, experienced a 20-43% drop in housing prices over the course of 2020. In contrast, less urban areas like Kakrola and Uttam Nagar experienced average price increases of 66% and 75% respectively, as buyers in New Delhi may have been moving out from the city centres. It seems that consumers no longer value being in proximity to city centers as the need to be physically close to work & services has been dramatically reduced due to various enhanced "remote economy" practices and virus containment measures.

COVID-19 Maybe Encouraging Consumers to Move Out of Urban Areas

Another trend confirms that this shift in consumer preference is largely caused by the pandemic: real estate market has been hit the hardest in markets that tend to be more populous & densely populated. For example, real estate values struggled in large cities like New Delhi and Mumbai. In contrast, smaller and more "outer" areas like Thane, Navi Mumbai actually have seen strength in its residential real estate prices thus far in the pandemic. We believe this is primarily because consumers are evading large, populous cities in favor of smaller ones, a trend we've also seen in other countries.

Average Price (in Rupees) of Residential Real Estate Price Per Square Foot

CityQ4'19Q1'20Q2'20Q3'20% Chg from Q4 (or from Peak)
New Delhi9,78810,0519,7499,189-9%
Navi Mumbai8,9619,0008,9689,053-1%
Gurgaon (Gurugram)7,3237,4427,4137,4800.5%

Comparing Real Estate in India's Major Urban Markets to Other Global Cities

The impact of COVID-19 on India’s urban population mirrors similar migration patterns in other major cities across the globe. For instance, New York City was the epicenter for Covid-19 in the US, and received a much more significant impact on real estate prices than other parts of the country. Manhattan, the most central borough, saw its real estate prices drop by 20%, while the other outer boroughs actually saw price increases due to the migration of those leaving the business hub.

LocationQ2 2020 YoY Price Change

Hong Kong faces a similar situation. The real estate market for Hong Kong has experienced a decline of 29% during the coronavirus outbreak since October 2019. The primary drop in prices were located in the downtown areas of Hong Kong. Interestingly enough, not all of Hong Kong has been hit with a drop in price. Outer areas like Sai Kung, Yuen Long, and Tuen Mun have seen real estate prices skyrocket by up to 50%. The pandemic has pushed many to move to areas that were once seen as less attractive.

District% Price Change (July 2020 vs October 2019)
Hong Kong Island-58.8%
Tsuen Wan-21.4%
Islands Districts-9.2%
Tai Po-4.8%
Sai Kung19.9%
Yuen Long33.6%
Tuen Mun54.2%

We saw similar trends in other international cities like Seoul and Singapore as well.

This map shows a change in PSF of private properties in Singapore by district between February and July

Indian Real Estate Markets Likely to See Similar Struggles

India has taken steps to soften the inevitable economic blow. For example, the Reserve Bank of India (RBI) made a mandatory EMI moratorium for banks to follow that would allow home loan borrowers to skip their monthly installment payments, and Prime Minister Modi has offered a nationwide stimulus of Rs. 20 lakh crore. Unfortunately, given what we're seeing in the consumer demand shift in real estate all over the world, it seems that the current trend of moving away from city centres may continue as long as COVID-19 is a threat.


To conduct the study and come to the conclusions about the residential real estate market in India, we researched over 1,500 different areas in 7 separate cities in different states and regions of India. These 7 cities are among the most populous cities in the nation. This gave us the greatest opportunity to cover the nation without collecting data from each city. We collected data across 4 quarters (Q4 2019 - Q3 2020)

To ensure our data was accurate and consistent we used residential real estate price data collected and provided on MagicBricks for all 7 states that we have conducted extensive research for. To make sure we are reporting our findings with comprehensive data we covered multiple residential property prices per square foot found in approximately 1,550 different localities and neighborhoods.

Sahmi Chowdhury

Sahmi is a finance graduate from Northeastern University. He has had experience in the financial services sector working at Brown Brothers Harriman in trade settlement and True Capital Management as an investment analyst prior to joining ValueChampion.