Why Sky-High Property Prices in India Don’t Reflect the Real Neighborhood

The Illusion of Luxury: Why High Property Prices in Indian Cities Don’t Reflect Real Quality of Life

As I look at the real estate landscape across Indian cities, it’s hard not to notice the staggering property prices, often comparable to some of the most developed cities in the world. Neighbourhoods like South Delhi, Bandra in Mumbai, and DLF Camellias in Gurugram boast astronomical rates, with properties selling for tens of crores. These “elite” areas are marketed as symbols of luxury, exclusivity, and affluence. But when I take a closer look, a stark disconnect emerges between the price tags on these properties and the actual quality of life in these neighbourhoods.

Living in one of these high-priced areas doesn’t guarantee an ideal environment. Despite the luxury homes and prestigious addresses, the streets outside are often chaotic, with traffic jams, congested roads, and unorganized public spaces. In South Delhi, for example, stepping out of a multi-crore apartment means facing unregulated markets, relentless honking, and litter scattered across the streets. I have to ask myself, what are people paying for here?

This gap highlights what I see as a major flaw in our urban development model. In many cases, high property prices are driven more by the social prestige of an area than by any genuine urban planning or infrastructure improvements. People are paying for an address, for the reputation that comes with a “posh” neighbourhood, and for the association with affluence, while the quality of public infrastructure, cleanliness, and city planning falls behind.

This isn’t just a superficial issue; it has a real impact on those who live in these areas. When property values are tied to status symbols instead of the urban experience, the gap between perceived luxury and everyday reality grows. And I believe this trend doesn’t serve anyone in the long run—not the residents, not the cities, and certainly not the vision of a truly modern, livable India.

Prestige over Practicality: The Social Status Trap in Indian Real Estate

One of the most striking aspects of India’s real estate market is how much we seem to pay for social prestige rather than practicality. In cities across the country, high property prices are often less about infrastructure and more about the reputation of the neighbourhood. Areas like DLF Camellias in Gurugram and builder apartments in South Delhi are perfect examples of this phenomenon. These properties are marketed as “luxury” primarily because they are associated with exclusivity and status.

Take DLF Camellias, for instance, where apartments sell for upwards of ?68 crore. This price tag buys you a prestigious address, a high-profile name, and perhaps some amenities that look impressive on paper. But what about the broader environment? What about the streets outside these luxury gates? When I look at these neighbourhoods, I see traffic congestion, chaotic public spaces, and a lack of organized amenities. It’s clear to me that people are paying for the reputation, not for an urban environment that truly justifies the price.

In South Delhi, the situation is similar. Builder apartments here can cost between ?20 crore to ?30 crore, and yet the surrounding areas are often crowded, with narrow streets, honking traffic, and littered public spaces. The “luxury” label seems to exist within the four walls of these homes, disconnected from the outside environment.

This obsession with social status over real, practical benefits is something I think we need to question. We need to ask ourselves: why are we paying so much for a label rather than for a place that actually enhances our daily lives? And more importantly, where is the role of government in this?

This is where I feel the Ministry of Housing and Urban Affairs could step in. By implementing more cohesive zoning and urban planning policies, they could help ensure that high-value areas offer actual quality-of-life improvements—not just prestige. Urban planning should be about more than just building high-end homes; it should be about creating environments that are livable and organized for everyone.

When Basic Amenities Become “Luxury” Features

As I look deeper into the real estate landscape in India, one thing becomes glaringly obvious: in many of our high-priced neighbourhoods, basic amenities are treated as luxuries. Reliable access to water and electricity, services that should be standard in any urban area, often become the selling points that drive up property values. It’s strange to think that in 2024, simply having 24/7 water and electricity can be marketed as a premium feature in a country aspiring to modernize its cities.

Take Gurugram, for example, where new launch property prices have skyrocketed by 160% over the last five years, jumping from ?7,500 per square foot in 2019 to ?19,500 in 2024. Noida isn’t far behind, with a 146% increase over the same period. But what do residents get in return for these steep costs? Basic services like consistent water supply, reliable electricity, and clean streets are still lacking in many areas, despite the soaring property prices. People are paying not for enhanced infrastructure or advanced urban design, but simply to have the basics—a 24-hour power supply and water access—which should be standard, not exclusive.

This problem isn’t limited to Gurugram and Noida. Cities like Bengaluru and Hyderabad have also seen sharp increases in real estate prices, with new project rates rising by 98% and 81%, respectively. Yet, just like in Delhi-NCR, these increases do not necessarily translate to a better living environment. In many cases, buyers are paying for a “luxury” experience that’s limited to within the walls of their homes. Outside, the issues remain: crowded roads, inconsistent public services, and unorganized markets that don’t match the high-end image these areas aim to project.

I believe that local municipal bodies, such as the Municipal Corporation of Delhi(MCD) and equivalent bodies in other cities, need to play a more active role here. Instead of allowing high property values to become disconnected from real, everyday quality of life, these organizations should work towards making basic services universally available. If high property prices mean anything, they should at least come with the assurance of a clean, organized, and well-serviced neighbourhood. By doing so, municipal corporations could help shift the definition of “luxury” from mere utility access to truly livable, well-designed environments.

The Speculative Market: Why Investors, Not Residents, Drive Up Prices

In India’s real estate market, there’s another hidden driver of sky-high property prices: speculative investment. Many properties in high-demand neighbourhoods are bought not as primary residences but as investment assets, status symbols, or safe havens for parking wealth. This speculative buying frenzy inflates property prices even further, often pricing out genuine homebuyers who seek a livable space rather than a financial asset.

Consider South Delhi or Mumbai, where high-end properties are seen as investment vehicles by wealthy individuals and NRIs (Non-Resident Indians) looking to invest in “prestigious” locations. In neighbourhoods like Bandra, apartments are frequently bought up by investors who have no intention of living there. These properties remain vacant or are used sparingly, creating artificial demand that drives up prices without corresponding improvements in local infrastructure or amenities.

The data speaks volumes. In Mumbai, the price per square foot for new housing projects rose from ?25,820 in 2019 to ?35,500 in 2024—a 37% increase over five years. While this may seem modest compared to cities like Gurugram, it highlights a trend where even the wealthiest buyers are paying a premium in a market where properties are rarely tied to actual livability or daily use. Investors are more interested in a property’s value as an appreciating asset than in a functional home.

In cities like Gurugram and Noida, this speculative trend is even more pronounced, with prices rising by 160% and 146% in five years, respectively. This rapid increase is driven not by people looking to build communities or improve the urban landscape, but by individuals who see these properties as financial assets to be bought and sold for profit. This approach leaves neighbourhoods feeling empty, devoid of a vibrant community, and disconnected from the city around them.

This is where the Real Estate Regulatory Authority (RERA) could make a difference. By imposing stricter regulations on speculative buying, RERA could help ensure that real estate serves its true purpose: creating homes, not just assets. Limiting the impact of speculative buying could bring prices closer to real demand, making these areas more accessible to residents who actually wish to live there, while putting pressure on developers to enhance the infrastructure and amenities of high-demand neighbourhoods.

The Neighborhood-Property Disconnect: High-End Developments Amidst Unorganized Markets and Traffic Chaos

One of the most surprising aspects of luxury real estate in India is how disconnected high-end developments are from their neighbourhoods. Take the case of DLF Camellias in Gurugram or other builder apartments priced in the tens of crores. Inside, these properties offer an oasis of luxury, yet step outside and the surrounding areas tell a different story. The reality outside often includes narrow roads choked with traffic, crowded unorganized markets, and littered streets—all of which undermine the notion of “luxury” beyond the gates.

By contrast, in cities like Dubai, luxury properties don’t just offer high-end amenities within private walls but are integrated into well-maintained, organized surroundings. In Dubai, luxury developments like those on the Palm Jumeirah or Downtown Dubai are complemented by wide, well-paved streets, scenic waterfronts, and clean, orderly public spaces. The luxury isn’t just in the property itself; it extends to the entire neighbourhood, creating an experience that feels cohesive and seamless. There, public and private spaces harmonize to offer a complete, high-quality urban experience.

India’s “luxury” neighbourhoods, however, often fail to extend that experience beyond individual properties. Despite paying high prices, residents of these high-end areas in cities like Delhi and Gurugram face traffic chaos, a lack of organized public spaces, and crowded markets right outside their gated complexes. It’s as if luxury in India stops at the gate, while the broader neighborhood struggles to match the same standard.

I believe this is where urban development authorities and initiatives like the Smart Cities Mission ( Ministry of Housing and Urban Affairs )could bring in a Dubai-inspired approach. Rather than focusing solely on new projects, they could prioritize improving the infrastructure in existing high-demand areas, ensuring that “luxury” neighbourhoods offer a genuinely high standard of living both inside and outside. By investing in better roads, organized markets, and green spaces, urban authorities could help Indian cities offer a comprehensive luxury experience, not just isolated pockets of affluence.

For the prices people pay in these areas, they deserve not just a luxury apartment but a well-maintained, organized environment that matches that investment. Learning from cities like Dubai, India’s urban authorities could make these neighbourhoods truly livable, bringing our concept of luxury closer to global standards.

Public vs. Private Space: The Gated Bubble Effect in India’s Urban Landscape

In India's luxury real estate market, there’s a noticeable divide between the high-end comforts found inside gated communities and the neglected state of public spaces just outside. This "gated bubble effect" is a defining characteristic of many so-called luxury neighbourhoods across cities like Delhi, Gurugram, and Bangalore. Inside these developments—places like DLF Camellias or upscale builder apartments in South Delhi—residents enjoy meticulously curated amenities: private gardens, state-of-the-art gyms, and 24/7 water and power. But step outside the gates, and the environment changes drastically, revealing congested streets, chaotic markets, and littered sidewalks. The sense of exclusivity ends abruptly at the boundary of these luxury properties, creating a jarring contrast between private affluence and public disarray.

This disconnect reveals a broader issue in India’s approach to urban development, where high property prices reflect social status but not an organized or livable neighbourhood. Consider the recent data on property price surges in Indian cities. In Gurugram, prices for newly launched housing projects skyrocketed by 160% in five years, rising from ?7,500 per square foot in 2019 to ?19,500 in 2024. In Noida, prices jumped 146% over the same period, and in Bengaluru, they rose 98%. These soaring prices create an illusion of high value, yet they seldom translate into improved infrastructure or public amenities. Residents pay a premium for their private enclave, but the public areas that connect these neighbourhoods remain underdeveloped and often chaotic, highlighting the gap between high prices and actual livability.

Addressing this disconnect requires more than just private development; it calls for a collaborative effort by municipal bodies, urban planning authorities, and public works departments. By investing in the public spaces surrounding these high-end developments, these bodies could bridge the gap between private luxury and public neglect. A neighbourhood where public and private spaces are equally well-maintained would not only offer a better quality of life but also create a more authentic sense of value for residents paying premium prices. True luxury isn’t just about isolated amenities; it’s about a well-designed, organized environment that benefits the whole community, creating a city that everyone can enjoy.

Missed Opportunities for Infrastructure Investment in High-Value Areas

India’s luxury real estate market, with its rapidly increasing prices, represents a missed opportunity for reinvestment in public infrastructure. When property prices soar, especially in high-demand areas like Delhi-NCR, Mumbai, and Bengaluru, one would expect this revenue to contribute to improved infrastructure, better connectivity, and cleaner, more organized public spaces. Yet, as property values skyrocket, these high-value neighbourhoods often continue to struggle with the same public infrastructure issues—congested roads, chaotic traffic, limited pedestrian areas, and inconsistent utility services.

The figures indicate substantial wealth being generated in these areas, and this rising real estate value could ideally translate into greater tax revenue and reinvestment potential. However, rather than using this revenue to address public needs, these neighbourhoods often remain isolated in their luxury bubbles, with little improvement to the surrounding infrastructure.

This gap points to a fundamental issue in India’s approach to urban development: high property prices are often treated as an outcome, not an opportunity. Unlike cities that prioritize reinvestment in high-value areas, India’s municipal and state urban development authorities tend to focus their resources on new developments rather than enhancing the quality of life in existing, high-demand neighbourhoods. The result is a cycle where luxury remains private, while public spaces fall behind.

The Broader Consequences: Urban Inequality and the Inconsistent Living Experience

As we continue to shape India’s urban spaces, the focus on prestige rather than practical livability in real estate pricing has long-term consequences for the social and economic fabric of our cities. When property values are driven by exclusivity within individual complexes rather than a cohesive urban environment, we risk creating cities where opportunity and quality of life are accessible only to a select few, undermining the potential for a balanced, thriving urban community.

One of the most significant consequences of this approach is the erosion of community spaces. In neighbourhoods where luxury exists only behind gated walls, public spaces—essential for fostering community interactions and inclusivity—are often neglected. Residents from different economic backgrounds lack access to clean, organized parks, public squares, and walkable areas. This not only reduces quality of life but also disrupts the city’s social connectivity, as people become confined within isolated communities rather than being part of a shared urban landscape.

Moreover, as more people are priced out of central neighbourhoods, we see an increasing trend of urban sprawl—the expansion of city boundaries as people move farther from the centre to find affordable housing. This sprawling growth results in longer commute times, environmental strain, and greater demand for infrastructure at the edges of cities, where services like transportation, healthcare, and education often struggle to keep up. The emphasis on exclusive, high-priced central areas inadvertently pushes the middle and lower-income populations outward, creating a fragmented, unsustainable urban structure.

The emphasis on prestige-based pricing also affects economic diversity within neighbourhoods. With fewer affordable housing options in prime locations, cities lose the presence of key professionals—teachers, healthcare workers, and emergency personnel—who provide essential services but cannot afford to live near their workplaces. This disrupts the natural economic diversity of neighbourhoods, leading to “elite zones” that lack the dynamic, multi-income population needed to support a well-rounded, resilient community.

Finally, this model places limitations on India’s ability to become globally competitive in terms of urban livability. Cities like Tokyo, Copenhagen, and Singapore have demonstrated that a focus on inclusive urban development—where infrastructure quality and livability drive property values rather than exclusivity—creates vibrant, attractive environments that draw talent, investment, and tourism. Without a similar approach, Indian cities risk lagging, as we continue to invest in fragmented, prestige-driven real estate rather than holistic urban quality.

Urban development authorities and state governments have a role to play in reversing these trends. By creating policies that encourage mixed-income housing, invest in community spaces, and prioritize high-quality public infrastructure, we can begin to transform our cities into inclusive, competitive urban centres. Real estate values should reflect the true benefits of a livable city, where every resident, regardless of income, can experience a high standard of urban life.

The real challenge—and opportunity—is to envision a future where India’s cities aren’t defined by isolated luxury, but by cohesive communities that balance private success with public value. A focus on integrated, inclusive development would not only improve urban quality but also ensure that every neighbourhood is a meaningful part of the city’s success story.

How Citizens Can Demand More: A Call for Rational Urban Development

The power to transform India’s urban landscape doesn’t rest solely with government bodies or developers; it’s also within reach of every citizen. As residents of these cities, we have a voice in demanding better urban planning, inclusive public spaces, and real estate prices that reflect livable, functional neighbourhoods rather than just prestige. By actively engaging in the conversation on urban development, citizens can play a crucial role in reshaping cities into spaces that serve everyone—not just a privileged few.

Citizens can start by organizing and voicing their concerns through resident associations or civic groups, advocating for clean, organized public spaces and reliable infrastructure as essential parts of their neighbourhoods. Community petitions, for instance, can be a powerful way to urge municipal corporations and urban planning bodies to prioritize development projects that benefit the wider neighbourhood, not just isolated luxury enclaves.

Additionally, people can demand transparency and accountability from real estate developers. By choosing to invest in neighbourhoods that demonstrate a commitment to public infrastructure and accessible amenities, buyers can shift market demand toward better-planned, inclusive developments. When citizens opt for projects that align with sustainable urban planning, it sends a message to developers that high-quality public amenities and infrastructure are not optional but essential.

Social media can also serve as a strong platform for raising awareness. By tagging local municipal bodies, urban development authorities, and even the Ministry of Housing and Urban Affairs in posts that highlight issues—such as lack of clean streets, public parks, or organized markets—citizens can draw attention to the need for public investment in high-demand areas. This kind of civic engagement not only raises public awareness but also pressures authorities to respond to the demands of their residents.

At its core, real estate values should reflect the quality of life in a neighbourhood, not just exclusivity. By advocating for policies that prioritize cohesive, inclusive development, citizens contribute to the creation of urban spaces that are genuinely livable. Our cities deserve more than isolated luxury bubbles; they deserve to be vibrant, accessible, and reflective of everyone’s right to a high quality of life.

Toward a Real Estate Market That Reflects Livability, Not Just Prestige

Achieving this requires a combined effort from government bodies, developers, and citizens alike. Local municipal corporations and urban planning authorities must prioritize the infrastructure and services that benefit entire neighbourhoods, ensuring that public spaces, transportation, and utilities are as integral to high-value areas as gated communities and private amenities. Developers, in turn, should recognise that true luxury extends beyond property walls. By building projects that contribute to the neighbourhood’s overall quality and encourage a sense of community, developers can create properties that are genuinely worth their price tags.

For citizens, the shift in mindset is equally essential. By choosing to invest in neighbourhoods and projects that emphasize inclusivity and well-rounded infrastructure, buyers can drive demand for developments that reflect real value—livable, sustainable, and accessible areas where all can thrive.

Ultimately, the goal is to cultivate urban spaces that don’t just mirror social exclusivity but create balanced environments where high prices come with high standards of living. As we move toward a real estate market driven by livability, we lay the groundwork for cities that are not only economically prosperous but also socially inclusive, resilient, and a true reflection of what modern, equitable urban living can achieve.