India is undergoing one of the largest urban transformations in the world. A fresh report from Square Yards, summarized in a Hindustan Times article, reveals that the built-up area (i.e., the urban footprint in terms of land covered by manmade structures, buildings, and other tangible surfaces) across India’s top eight cities has more than doubled from 2,136 sq km in 1995 to 4,308 sq km in 2025.  

Cities like Pune and Bengaluru are leading the growth in terms of percentage expansion:

• Pune’s built-up area grew by 332%, from just 86 sq km in 1995 to 373 sq km in 2025.

• Bengaluru increased by 186%, from 174 to 489 sq km.  

This monumental change has profound consequences for the residential sector:

1. How are homes built?

2. Where do people live?

3. What kind of homes are in demand?

4. How is infrastructure stretched?

5. How do environmental concerns play into design and governance?

6. How are prices affected?

Let us explore these dimensions, what’s already happening in 2025, and what residents, developers, planners, and investors need to consider.

A. Key observations (1995 to 2025)

Fig 1. Total built up area shift in last 30 years (top 8 cities)

• The Indian residential market is estimated at USD 268.40 billion in 2025, expected to grow to ~USD 372.5 billion by 2030 at ~6.8% CAGR.  
• Authorities are increasingly pushing for resilient urban infrastructure (World Bank, 2025), highlighting that more than 50% of the infrastructure needed for 2050 is yet to be built.  
These numbers set up the scale of change:

• The built environment is expanding fast

• Residential construction markets are large and growing

• There’s strong pressure for infrastructure, regulation, sustainability, and livability.
B. Impacts on the residential landscape
Let us look at the major ways this doubling of urban built-up area is affecting, and will continue to affect, residential real estate in India, in terms of supply, demand, pricing, design, infrastructure, and socio-environmental outcomes.

1. Supply & location of housing
• Peripheral expansion: As built-up area grows, much of it is happening at the fringes of existing urban cores. Land is relatively cheaper, regulations are often laxer, transportation links weaker. This shift pushes residences farther from city centres. For homebuyers, this means longer commuting times, more dependence on private vehicles unless public transit catches up.
• New towns / satellite suburbs: To absorb growth, many cities are expanding outward through planned extensions, satellite townships, and ring-road developments. In Bengaluru, for instance, recent infrastructure projects (outer ring roads, peripheral expressways) facilitate residential growth in previously outlying villages. In Pune, too, peripheral regions are seeing increases in residential projects as developers seek land.
• Vertical vs horizontal growth: Cities with severe land constraints (Mumbai, parts of Delhi NCR) tend to see more vertical growth (tall apartment towers, high-rise clusters) rather than horizontal sprawl. In cities with more expansion headroom (e.g. Bengaluru, Pune), more horizontal spread is feasible. However, horizontal spread tends to require much more infrastructure investment per unit (roads, water, sewage, power lines) and often leads to inefficiencies unless planned well.

2. Demand shifts
• Affordability pressures: As city cores become expensive or saturated, many buyers/investors look to peripheries. This has implications for infrastructure catch-up: often schools, hospitals, public transport are under-provisioned in fringe areas, raising real cost of living. Demand from middle and lower-middle income households will likely be further pushed outward.
• Housing typologies: There will be increasing demand for housing that is “value for money”, smaller units, efficient layouts, shared amenities, mixed-use developments. At the same time, luxury/residential premium properties will cluster in more accessible, central or well-connected peripheral zones.
• Lifestyle & commuting trade-offs: Quality of life (open space, less congestion, greener surroundings) often improves with distance from core but commuting costs and time increase. Hybrid & remote working (post-COVID) might push preferences for larger homes with workspaces even in fringe areas, but connectivity will be a decisive factor.

3. Pricing, land values, and investment
• Land price inflation near connectivity: As new roads, metros, flyovers, expressways are planned, the land along these corridors becomes premium. Developers and speculators anticipate increased value, often driving up land prices even before infrastructure is ready.
• Speculative risk: Peripheral areas may be overvalued if infrastructure delays or zoning / regulation issues (e.g., unclear FAR, utilities) crop up. Investors need to watch regulatory approvals, master plans, and implementation.
• Supply vs demand balance: In many cities, demand is still strong, but supply in core areas is constrained. Peripheral supply helps meet demand, but only if paired with infrastructure; otherwise, ghost town risks emerge (areas where homes are ready but people hesitate to move in until roads, water, transport are functioning).

4. Infrastructure, services & planning
• Transportation: Demand for public transit (metro, buses, suburban rail) to extend into peripheral zones will rise. Without this, traffic congestion, air pollution, and commuting times will degrade quality of life and affect desirability and value of fringe housing.
• Utilities & services: Water supply, sewage, waste management, electricity supply, electricity supply, electricity supply, internet / broadband, all become more challenging with sprawl. These costs are higher per unit in low-density, spread-out areas.
• Public amenities & green space: Parks, community centres, healthcare, schools need to follow residential growth. Without these, new neighborhoods may suffer socio-economic disadvantages. Also, open and green spaces are more likely to be compromised unless protected in zoning.
• Planning & regulation: Master plans, zoning, FAR / FSI rules, building by-laws must adjust to rapid spatial growth. Also, enforcement becomes more difficult in peripheries. Authorities may need to relax some norms (e.g. FAR, height restrictions) but ensure sustainable design to avoid heat islands, flooding, etc.

5. Environmental & livability concerns
• Climate and micro-climate effects: Larger built-up areas often mean less open land and vegetation, more surfaces that absorb heat increasing urban heat island (UHI) effects. Also, drainage & flood risk increase if natural water bodies and runoff paths are encroached. For example, studies show in Delhi NCR and its peri-urban areas, built-up growth has produced thermal discomfort.  
• Pollution, air and noise: More traffic, fewer green buffers, more construction all contribute to air pollution, noise, and poorer air quality. As people get pushed outwards, reliance on vehicles increases, unless public transport is timely and affordable.
• Resource usage and sustainability: Water stress, energy demand (especially for cooling), waste management all become more taxing. The built environment must adapt (green building norms, efficient designs, renewable integration, etc.).

C. 2025: What do we see now?
Some evident trends in 2025 already reflect adaptation (or struggle) to these pressures.
• Residential construction market size: ~USD 268.4 billion in 2025. Housing demand remains strong, especially in tier-I and major tier-II cities. Developers are focusing on apartments and condominiums, which represented about 70% of revenues in 2024.  
• Master planning updates & regulatory change: Cities like Ghaziabad have recently approved updated master plans (e.g., Master Plan 2031), with more land earmarked for residential zones, TOD (Transit-Oriented Development) zones, special development areas, increased FAR in key zones, and green space allocations.  
• Density pressures & space loading: In Delhi-NCR, the “loading factor” (difference between super built-up area and carpet area) has increased. In Q1 2025, it’s about 41% compared to ~31% in 2019. That means buyers are getting less usable (carpet) space per unit of sale. A symptom of scarcity of prime land, cost pressures, etc.  
• Regulation and building bylaws: Noida / Greater Noida / YEIDA are planning major overhauls of their bylaws to scrap ground coverage caps, increase FAR, etc., in response to demand, land constraints and allow more efficient densification.  
• Brownfield redevelopments / internal densification: In dense regions like Mumbai, where land is scarce, redevelopment of old societies, infill development, and vertical expansion are more common. This help increase supply without excessively expanding the built-footprint outward.

D. City-level impacts: Spotlight
Let’s look at some city-specific implications, given differences in their built-up growth, infrastructure, regulatory environment, and geography.

E. Implications for developer strategy
Developers are being forced to adapt in how they conceive, finance, and deliver residential projects.
• Focus on connectivity: Residential projects farther out only succeed if connectivity is good: road, metro, bus. Developers may invest in, or partner with for infrastructure (e.g. access roads, shuttle services) or locate projects right next to upcoming transit corridors.
• Efficient land use: Higher FAR / FSI, smaller plot sizes, more compact designs, shared/community facilities. Use of vertical construction. Also more reuse/redevelopment of inner city plots (redevelopment societies etc.) to avoid outward sprawl.
• Mixed-use & integrated townships: Combining residential, retail, offices, green spaces to reduce the need to commute; walkability; and enabling lifestyle amenities closer to homes.
• Sustainability & resilience: Developers will be under pressure to incorporate green building design: energy-efficient systems, water harvesting, waste management, green cover, landscaping, flood mitigation. Especially as climate risk (heat waves, heavy rains) increases. Also stricter building codes are being adopted in many cities.
• Affordability balancing: To capture the middle market, developers will need to offer units closer to affordable thresholds even in peripheral zones, smaller units, but good quality while premium housing will gravitate to best-served locations.

F. Challenges & risks
• Infrastructure lag: Often, land gets suburbanized or incorporated into built-up area before basic infrastructure (roads, water, sewage, electricity) is extended. That leads to low quality of life, higher expenses, and sometimes abandonment or lower occupancy.
• Environmental degradation: Unplanned expansion can lead to encroachment on water bodies, natural drainage paths, green belts. Increased flooding, heat, loss of biodiversity.
• Regulation / approvals bottlenecks: Even when master plans are in place, delays in zoning, permit approvals, environmental clearances can slow or distort development.
• Cost escalations: Land, raw materials, labor costs go up faster in stretched supply chains. For remote peripheral areas, cost of transporting materials adds up.
• Social inequities: Slower access to amenities, public services, schools, healthcare for fringe communities; potential for socio-spatial segregation (rich enclaves vs non-serviceable outskirts).

G. What should buyers & homeowners be thinking?
If you’re purchasing or residing in one of these expanding cities (or planning to), here are strategies and considerations:
1. Evaluate connectivity now, not promised: Check existing transport links and committed infrastructure (e.g. metro corridors, ring roads) rather than planned ones that may get delayed.
2. Check master plan & zoning policies: Is the land properly zoned for residential use? What are the FAR / FSI / height / setback norms? Beware plots with unclear land use or regulatory anomalies.
3. Consider long-term infrastructure quality: Water, waste disposal, power, broadband, roads. These often determine livability more than just the apartment finish.
4. Balance carpet vs super-built up / loading: Since loading is increasing, compare carpet area you get vs what you pay for. Often, super built up includes common areas, walls, etc., which reduce usable space.
5. Climate resilient amenities: Especially in newer or fringe areas, ensure adequate green cover, storm water drainage, elevation, cooling designs. Heat waves and monsoon deluges are more intense and unpredictable.
6. Resale / capital appreciation potential: Properties closer to good transport, well serviced areas are likely to appreciate more. Peripheral areas with poor access may struggle for capital growth, even if priced cheaper initially.

H. What’s needed on the policy / planning side?
To ensure that this doubling of built-up area results in livable, sustainable cities rather than sprawl disasters, planning / policy must do the following:
• Stronger enforcement of master plans: Ensure that growth is aligned with zoning, green belts, waterways. Prevent illegal colonies and non-conforming land use. (E.g., Ghaziabad’s plan adjustments and concerns over non-conforming land show this is already a live issue.)
• Ordinances favoring density where possible: Higher FAR / height allowances in well-connected zones; incentivize infill redevelopment; mixed-use zones; transit-oriented development.
• Integrated transit infrastructure: Road planning, metros, and last-mile connectivity are essential. Without these, outer areas become traffic nightmares.
• Environmentally sustainable design: Rainwater harvesting, green spaces, solar / renewable energy, low-carbon materials, passive design. Resilience to climate extremes must be built in.
• Affordable housing policies: Subsidies, schemes, or inclusionary zoning so housing remains accessible for low-/middle-income groups. Provision for community services and public amenities.
• Data, monitoring, mapping: Regularly updated maps of built-up area, infrastructure adequacy, heat maps, land use changes. Tools like remote sensing, GIS, land-use atlases are crucial.

I. What does 2025 and near future hold? Projections & expectations
Given the observed trends, here are plausible trajectories for the next 5-10 years (i.e., up to ~2030 and beyond):
• The built-up area in major cities will continue to expand, especially in cities like Pune, Bengaluru and Hyderabad. The pace may slow if land becomes scarcer or regulations tighten, but the growth will continue.
• Peripheral zones will become more “urbanized” in both form and service, with more gated communities, township developments, mixed-use projects.
• Infrastructure investments (roads, metro lines, suburban transit) will be a determinant of growth. Projects that unlock connectivity will see land around them appreciating more quickly.
• With increasing density, apartment typologies will also evolve more micro-units, more high-rise towers, more co-living / shared amenity models in some cases.
• Environmental regulation, resilience and sustainability will become more central, not optional. Cities may mandate eco-building certifications, impose penalties for non-green design, integrate flood and heat mitigation in building codes.
• Affordability pressures will force creative financing, smaller homes, perhaps more rental-housing supply. Public / private partnership models may be more common.

J. Challenges unique to 2025 & beyond
• Climate change intensification: Heatwaves, intense rainfall, flooding are increasing with climate change. Urban built-up growth exacerbates both the effect of urban heat island and risks of flash floods. As shown in World Bank reports, investment in resilient urban infrastructure is essential.  
• Materials & labor cost inflation: Post-pandemic supply chains, rising energy costs, logistics issues drive up construction costs. This, in turn, raises housing prices, and forces some compromise on quality or finishes.
• Regulatory delays / inconsistent implementation: Even when policy is good on paper, implementation is often slow or uneven. Encroachments, informal settlements, non-compliance with zoning / by-laws remain significant.
• Equity & social inclusion: Ensuring that growth isn’t just for the affluent. Marginalized populations often get pushed to least desirable peripheries with poor services. Affordable housing and social infrastructure must keep pace.

The data clearly shows that Indian cities are expanding in built footprint, and that expansion is reshaping where and how people live. For the residential real estate sector, this means both opportunity and responsibility: opportunity in unserved markets, affordability in fringe areas, innovation in transport and building design; responsibility to ensure that expansion doesn’t lead to degraded quality of life, marginalization, or environmental collapse.

As we move through 2025 and toward 2030, key success will come to those developers, planners, and buyers who align with connectivity, sustainability, affordability, and regulatory clarity. The doubling of built-up areas isn’t merely about more land under buildings, it’s about how cities choose to grow, how residents choose to live, and whether urban expansion is inclusive, resilient, and sustainable.

 

 

Source:

-          News excerpts from Hindustan Times published on 11^th September

-          JLL Primary Research

Author & Editor: Sumedha Das