India’s housing market holds steady in 2025 as sales hit 3.48 lakh units

India’s top eight cities sold 348,204 units last year reflecting developers’ confidence in long-term demand fundamentals with a minor decline of 1 per cent, according to Knight Frank India survey.

In the same period, new launches were recorded at 362,184 units across the top markets declining 3 per cent YoY however continuing to outpace sales reflecting developers’ confidence in long-term demand fundamentals.

Notably, sales in H2 2025 stood marginally higher by 0.4 per cent in year-on-year (YoY) terms at close to 178,000 units and despite volumes being largely comparable with the previous period, sales volumes in H2 2025 stand as the highest since the end of 2013. Market health remained stable, with the quarters-to-sell (QTS) ratio steady at 5.8 in H2 2025, signalling sustained absorption. Weighted average prices rose across all markets, led by NCR with 19% YoY growth. These trends underline the continued resilience and evolving dynamics of India’s residential real estate sector.

“The affordable segment of units priced under INR 5 million has seen a gradual and consistent decline since 2018, both in the share and volume of sales, as rising land prices, construction costs and selective buyer behaviour weigh on demand.”

“The market is transitioning from rapid expansion to a more calibrated, trajectory, supported by strong household balance sheets and long-term urban fundamentals. Importantly, manageable inventory levels and low quarters-to-sell reinforce that the residential sector remains active, disciplined and structurally balanced as it moves into 2026, said Shishir Baijal, International Partner, CMD, Knight Frank India.

Mumbai, the country’s largest residential market, recorded a 1% YoY increase in sales. Chennai saw a rise of 12% YoY in number of units sold in 2025.

In contrast, NCR saw sales decline by 9% YoY, largely due to elevated base effects and selective market activity in high-value corridors. Pune also reported a 3% YoY contraction, while Bengaluru remained broadly stable, supported by steady end-user demand and a balanced supply pipeline.

Price appreciation remained a defining feature of the residential landscape in 2025.

Weighted average residential prices recorded strong YoY growth across key cities, led by NCR at 19 per cent, followed by Hyderabad (13%), Bengaluru at 12% and Mumbai at 7%. ting INR 1+ake up 50% of all sales in 2025 Properties priced above INR 1 crore constituted approximately 50% of total residential sales across the top markets in 2025, registering a 14% year-on-year increase. In absolute terms, 175,091 units were sold in the INR 1 crore-plus category during the year, underscoring the growing dominance of higher-value housing in overall market activity.

While housing affordability has improved across most major markets—enabling a sizeable cohort of buyers to move up the value curve—the residential market has simultaneously become more polarised across price categories.

Homes priced below INR 1 crore, and particularly those under INR 50 lakh, continued to face pressure through 2025, marked by a concurrent softening of demand and supply.

Conversely, the lowest income segments continue to encounter structural constraints, including challenges in access to formal credit, buyer profiling limitations, and the limited availability of appropriately priced and economically viable housing stock in urban markets. These factors have collectively led to a progressive thinning of activity at the lower end of the price pyramid, even as aggregate market health remains stable.

Gulam Zia, International Partner, Senior Executive Director, Research, Advisory, Infrastructure and Valuation, Knight Frank India, said, “The current trajectory increasingly looks like growth is peaking while city and segment-specific nuances are emerging. Homes priced above INR 1 crore now constitute half of total sales, highlighting the decisive tilt toward higher-value products.”

Looking ahead, the residential sector stands at a possible inflection where it remains to be seen if the premium segments will continue to support market volumes in 2026. While rapid volume expansion may remain limited after two years of peak sales, stable absorption, selective price appreciation, and disciplined supply additions are likely to define market activity in 2026.

Are there restrictions in the number of units purchased by NRIs in India? How will it impact repatriation? Sharon DeSouza, Sharjah.

NRIs can buy unlimited residential and commercial properties in India but repatriation is restricted to $1 million per financial year. Rental income and sale proceeds are also subject to taxation with long-term capital gains taxed at 12.0%. This is besides TDS obligations. Moreover, double taxation may apply if an NRI resides in a country with which India has no DTAA.

Can commercial property be purchased with more than one co-owner? Please clarify. Arvind Malia, Dubai.

Yes. Commercial property can be purchased with more than one co-owner. It is advisable to clearly specify the contribution of the co-owners on purchase of the property pro rata in the ratio of their ownership in the property. The taxation of the property will be done on co-ownership basis.