What’s Driving the 3.6% Rise in All-India House Price Index in Q1 FY26?
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Synopsis
The Reserve Bank of India reports a notable rise of 3.6% in the All-India House Price Index for Q1 FY26, indicating changing dynamics in the real estate sector. Discover how this impacts household wealth and economic decisions.
Key Takeaways
- HPI increased by 3.6% year-on-year.
- New base year is 2022-23.
- Includes 18 major cities.
- Residential investment correlates with price increases.
- Changes in HPI affect household wealth and decisions.
New Delhi, Oct 9 (NationPress) The Reserve Bank of India (RBI) announced on Thursday that the all-India House Price Index (HPI), which is based on transaction-level data from 18 major cities, has seen an increase of 3.6 percent year-on-year in the first quarter of the current fiscal year (Q1 FY26).
The HPI value experienced a slight uptick in Q1 2025-26, with Nagpur, Chandigarh, Chennai, and Kochi showing the highest increases compared to the previous quarter.
According to the Central Bank, “The all-India HPI increased by 3.6 percent in Q1 2025-26, a decline from the 7.6 percent growth observed in the same quarter last year. On a quarter-on-quarter basis, the HPI rose by 2.0 percent in the same period.”
The RBI released this HPI using a new base year of 2022-23, replacing the earlier base year of 2010-11.
The HPI is compiled quarterly based on transaction-level data from registration authorities, now including 18 major cities. The new series adds eight cities—Hyderabad, Thiruvananthapuram, Pune, Ghaziabad, Thane, Gautam Buddha Nagar, Chandigarh, and Nagpur—to the existing ten cities.
The Central Bank stated, “A house is not merely an asset but also a vital consumption good for households, providing shelter and various services. Changes in house prices influence households’ perceived lifetime wealth, thereby affecting their spending and borrowing decisions.”
As house prices rise, the value of housing relative to construction costs increases, making new construction more profitable when prices surpass these costs.
Thus, residential investment typically correlates positively with house price increases. Furthermore, fluctuations in house prices can impact bank lending and vice versa, with gains in house prices enhancing housing collateral.
Point of View
The recent rise in the House Price Index indicates a complex interplay of demand and supply in the real estate market. While the increase signifies growing property values, it also raises concerns regarding affordability for average consumers. The RBI's new base year reflects a forward-thinking approach to economic data, ensuring that we remain attuned to current market dynamics.
NationPress
09/10/2025
Frequently Asked Questions
What is the All-India House Price Index?
The All-India House Price Index (HPI) is a statistical measure that tracks changes in residential property prices across major cities in India, providing insights into the real estate market.
How is the HPI calculated?
The HPI is compiled quarterly based on transaction-level data received from registration authorities in various cities.
Why is the base year for the HPI changed?
The base year is updated to reflect current market conditions and provide a more accurate representation of price trends.
What impact does the HPI have on household decisions?
Fluctuations in the HPI can influence household spending and borrowing decisions, as changes in property values affect perceived wealth.
Which cities are included in the new HPI series?
The new HPI series includes 18 major cities, with eight new additions such as Hyderabad, Thiruvananthapuram, and Pune.
