Gurugram is one of India’s most expensive real estate markets, but a viral video by sector expert Vishal Bhargava says it’s a “house of cards”. Bhargava’s concerns about a correction may not be entirely unfounded.
Average residential property prices in the National Capital Region increased by 81 per cent between Q1 2020 and Q1 2025, according to a report by ANAROCK, a real estate consultancy. Gurgaon, which is part of the region, witnessed an 84 per cent increase, with rates going from Rs 6,150 per sq. ft. to Rs 11,300.
A snapshot of residential prices in Gurugram shared by No Broker, a real estate platform, shows:
1BHK: Rs 48 lakh
2BHK: Rs 89 lakh
3BHK: Rs 3.7 crore
4BHK: Rs 5.2 crore Interestingly, Gurugram saw its sharpest year-on-year price jump in 2024, with average residential rates rising 30 per cent—from Rs 7,660 per sq. ft. in 2023 to Rs 9,980 in 2024. The spike was largely driven by a surge in new launches in the luxury segment (priced above Rs 1.5 crore), according to ANAROCK.
“This trend has largely been fueled by a deep supply-demand mismatch, buoyant NRI inflows and a shift towards luxury housing,” said Prashant Thakur, regional director and head of research and advisory at ANAROCK Group.
Developers claim the market is being driven by genuine end-user demand, but not all experts agree with that.
‘Troubling bubble’
“Unfortunately, we are seeing increased investor activity once again like in the early 2000s. This increases the worrisome possibility of a bubble forming. If demand weakens or liquidity conditions worsen for any reason, there would be consequences. Long-term sustainable growth will be based on real end-user demand, affordability, and the speed at which new supply comes online,” said Thakur.
Varun Chaudhary, managing director at CG Developers, believes much of the growth is speculative. “Traders are booking properties with a minimum down payment and flipping them instantly for profits. Builders are also encouraging this, as it helps them inflate prices and sell out quickly. Now, with prices flattening, many buyers are unable to exit or make further payments. It will be completely wrong to dismiss the signs of a bubble, especially when price-to-rent ratios are increasingly becoming unsustainable and speculation is gripping new launches,” he said.
Sunil Sisodiya, founder and chairman of Neworld Developers, doesn’t believe that the surge is purely speculative. “While home prices in Gurugram have indeed rapidly escalated since 2021, the majority of this price growth is based on structural demand rather than speculative risk.”
“Multiple issues triggered this growth, including but not limited to, large infrastructural spends like the Dwarka Expressway, the emergence of Gurugram as a city for corporates and startups, and a post-Covid lifestyle shift of preferring larger homes in planned communities. Although some price moderation may occur in certain micro-markets, a large-scale correction seems unlikely because of strong fundamentals,” he said.
The discussion around rental yields provides further context. According to Thakur, yields in some prime locations in Gurugram are between 3.5 per cent and 4 per cent. These are strong by Indian standards and suggest a healthy rental market, especially in the 2-3 BHK and luxury segments located close to commercial hubs.
Yet Chaudhary pointed out that capital values are often not aligned with rental returns. “Rents in Gurugram and Bengaluru are quite similar. However, home prices in Gurugram are around 30 per cent higher, leading to compressed rental earnings. Reports suggest nearly 60-65 per cent of current demand is from investors, not actual occupants. This further makes us question the sustainability of current price levels.”
Distress sales and project delays are not widespread, said Sisodiya. “Distress sales are uncommon in prime sectors, while developers are continuing to improve delivery timelines due to RERA compliance and the flight-to-quality trend. Some older developers have even started completing projects closer to the launch date, in response to higher demand.”
Reputable builders are focused on plotted developments and low-rise units with shorter development cycles and fewer regulatory hurdles, said Sisodiya.
Speculation vs demand
However, Thakur pointed to growing reliance on traders rather than long-term buyers. “The dominant model now is to sell out on launch, with traders snapping up multiple apartments using very little upfront capital. They intend to flip these before full payment. This approach has resulted in prices being influenced more by speculation than genuine demand. Unlike Mumbai and Bengaluru, Gurugram’s market does not rely heavily on its own resident population.”
Santosh Agarwal, executive director and chief financial officer at Alpha Corp Development, countered this view. “While investor interest remains a part of any healthy market, the predominant momentum is coming from families, professionals, and NRIs seeking lasting ownership. Project planning, pricing strategies, and delivery models are all being tailored around this shift. It’s no longer about transactional volumes; it’s about creating trust, quality, and sustained community value.”
The city’s real estate boom has also led to a spike in legal disputes.
“Gurugram’s real estate market has seen a surge in disputes, especially relating to under-construction projects,” said Rajiv Sharma, partner at Singhania & Co. “Common legal issues include project delays, structural defects, fund diversion, and violations of RERA’s 70 per cent escrow rule.”
Akshat Pande, managing partner at Alpha Partners, advised caution while investing in new launches. “When booking a home, especially in newly launched projects, buyers should be vigilant about incomplete or inadequate documentation, including but not limited to clear and marketable title and compliance with RERA norms, and lack of transparency regarding approvals, licenses, and statutory clearances. It is essential to assess the developer’s track record, the actual stage of construction vis-à-vis proposed timelines. Further, it is important to ensure that marketing offers such as discounts or free gifts do not influence the due diligence process or lead to impulse purchases,” he said.
So what can homebuyers do to assess whether a project is being driven by genuine demand or speculative trading?
Experts suggest the following indicators:
• Consistent and moderate price growth
• High occupancy levels
• Low number of resale listings
• Well-developed surrounding infrastructure
Thakur said, “Buyers should focus on reputable developers with a proven track record of timely completion. If a location has seen very quick price spikes and too many delays, it’s a sign of high investor activity.”
Chaudhary added that genuine demand is usually backed by livability. “A high occupancy rate, quality of amenities and organic price growth are better indicators of demand. On the other hand, projects with aggressive marketing, frequent resale listings, low occupancy, and discounts for early bookings often signal speculative interest. One of the most common signs is when units are being flipped frequently even before completion.”
Buyers beware
Legal safeguards exist but require vigilance. “Buyers need to check whether the project is predominantly booked by end users or traders, whether the builder-buyer agreement is ambiguous, and if RERA escrow rules are being followed,” said Sharma.
He also noted that section 12 of RERA allows legal recourse in case of misrepresentation. “Many times, builders create hype using advertisements or brochures that may later turn out to be misleading.”
Pande added that buyers can seek redress under RERA in case of overbooking or misuse. “If a project is later found to be overbooked or trader-heavy, action can be taken under RERA for taking bookings more than the number of units reported. In such cases, the RERA Authority can act either suo motu or based on a complaint filed by an aggrieved buyer. If a breach is established such as allotting the same unit to multiple persons, remedies under the Act, including refund, compensation, and penalties, may be invoked as per the applicable provisions,” he said.
Finally, there’s the choice between ready-to-move and under-construction homes. Sharma said each comes with its own risks. “Ready units reduce risks like non-delivery and quality issues, but are usually more expensive and require upfront payment. Regardless of the type, due diligence is crucial to ensure the title is clear and the property is free from legal hassles.”
For Agarwal, confidence is key. “Gurugram today is a trust-driven market. Buyers are focusing on reputation, not just price. They want developers who deliver consistently.”
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