India’s residential real estate market maintained its momentum through 2025, with housing demand holding steady at elevated levels despite rising prices and a moderation in new supply. According to Knight Frank India’s flagship report, India Real Estate: Office and Residential Market – July to December 2025 (H2 2025), residential sales across the country’s top eight cities stood at approximately 348,000 units in 2025, marking only a marginal 1% year-on-year decline.
The report highlights that while overall volumes have plateaued after a strong multi-year upcycle, the market remains structurally healthy, supported by end-user demand, manageable inventory levels, and sustained price growth across key cities.
Second Half of 2025 Records Strongest Sales Since 2013
A key takeaway from the report is the performance of the second half of the year. H2 2025 residential sales touched 178,406 units, making it the strongest second-half performance since 2013.
Sales during H2 2025 were marginally higher by 0.4% year-on-year, indicating that buyer sentiment remained resilient despite affordability pressures and higher ticket sizes.
Market health indicators also remained stable, with the quarters-to-sell (QTS) ratio holding firm at 5.8 quarters, signalling efficient inventory absorption even as unsold stock edged up marginally.
Mumbai Leads Sales; NCR Sees Sharp Price Growth
Mumbai continued to dominate India’s residential market, accounting for 29% of total sales in 2025.
- Mumbai: 97,188 units sold in 2025, up 1% YoY
- Bengaluru: 55,373 units, broadly stable YoY
- NCR: 52,452 units, down 9% YoY
- Pune: 50,921 units, down 3% YoY
While NCR saw a decline in volumes, it emerged as the strongest price growth market, recording a 19% year-on-year increase in weighted average prices, the highest among all major cities. Hyderabad, Bengaluru, and Mumbai followed with price growth of 13%, 12%, and 7%, respectively.
Knight Frank attributes the price rise largely to a higher share of premium and mid-premium launches, rising land and construction costs, and sustained demand in well-located projects.
Homes Above ₹1 Crore Now Account for Half of All Sales
One of the most significant structural shifts highlighted in the report is the growing dominance of higher-ticket housing.
- Homes priced above ₹1 crore accounted for nearly 50% of all residential sales in 2025
- Sales in this segment rose 14% year-on-year to over 175,000 units
- In contrast, homes priced below ₹50 lakh saw a 17% YoY decline, dropping to just 21% of total sales
This marks a sharp shift from 2022, when sub-₹50 lakh homes accounted for nearly 63% of total sales, underscoring a decisive tilt toward premium housing.
The mid-range segment (₹50 lakh to ₹1 crore) also witnessed moderation, with volumes declining 8% YoY, pointing to increasing demand polarisation.
Affordable Housing Under Pressure
While overall affordability has improved in several cities due to income growth and stable interest rates, the report notes that lower-income segments continue to face structural challenges.
Limited availability of viable affordable housing stock, rising land prices, higher construction costs, and constraints in access to formal credit have collectively weighed on demand in the sub-₹50 lakh category. Supply trends in this segment have mirrored demand, reducing the risk of speculative inventory build-up.
Inventory Levels Rise, But Market Remains Balanced
Residential launches across the top eight cities totalled 362,184 units in 2025, declining 3% YoY but still exceeding sales, leading to a gradual increase in unsold inventory.
However, Knight Frank notes that inventory levels remain manageable and well-distributed, with QTS remaining below six quarters nationally. Cities such as Pune, Chennai, and Kolkata continue to show relatively faster inventory churn, while NCR and Ahmedabad exhibit longer selling cycles.
Expert Commentary: Market Enters a Consolidation Phase
Commenting on the findings, Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said:
“India’s residential market in 2025 has clearly entered a phase of consolidation at elevated levels. With approximately 3.48 lakh homes sold during the year, demand has held steady after an exceptional multi-year run. This reflects genuine end-user depth rather than episodic spikes. Manageable inventory levels and low quarters-to-sell reinforce that the residential sector remains active, disciplined and structurally balanced as it moves into 2026.”
Echoing this view, Gulam Zia, International Partner and Senior Executive Director, Knight Frank India, added:
“Homes priced above ₹1 crore now constitute half of total sales, highlighting the decisive tilt toward higher-value products. While affordable segments remain subdued, larger markets continue to absorb supply steadily despite price appreciation, pointing to a structurally sound market.”
Outlook for 2026: Stability Over Volume Expansion
Looking ahead, Knight Frank expects 2026 to be characterised by stable absorption, selective price appreciation, and disciplined supply additions. While rapid volume growth may remain limited after two years of peak sales, the premium and mid-premium segments are likely to continue anchoring market activity.
The residential sector, the report concludes, is transitioning from expansion to maturity-led growth, with city-specific dynamics increasingly shaping outcomes.
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