Residential sales maintain peak momentum in 2025: Knight Frank
Despite a moderation in momentum of overall sales volumes, residential prices recorded healthy growth in 2025. Pricing was increased selectively, supported by financing incentives offered to homebuyers.
NCR saw sales decline by 9% YoY, largely due to elevated base effects and selective market activity in high-value corridors.
Residential sales across India’s top eight cities remained broadly steady and closed at approximately 348,204 units in 2025, maintaining momentum at the levels seen in the previous year with a minor decline of 1%. In the same period, new launches were recorded at 362,184 units across the top markets declining 3% year on year (YoY) however continuing to outpace sales reflecting developers’ confidence in long-term demand fundamentals. Mumbai made up 29% of all sales with sale of 97,188 units in 2025 with 1% growth YoY. National Capital Region (NCR) registered a decline in sale of 9% YoY with sales 52,373 units in 2025, while new launches also declined -16% YoY in the same period, according to Knight Frank India’s flagship report, ‘India Real Estate: Office and Residential Market – July to December 2025 (H2 2025)’.
Notably, sales in H2 2025 stood marginally higher by 0.4% 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.
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 3,48,000 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. At the same time, the affordable segment of units priced under INR 5 mn 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.”
Residential Sales Remains Resilient:
Mumbai, the country’s largest residential market, recorded a 1% YoY increase in sales, retaining its leadership position amid rising prices and limited land availability, unsurprisingly a larger proportion of the sales happened in H2 2025 which recorded a 3% rise YoY. 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.
Residential price growth sustains
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%, followed by Hyderabad (13%), Bengaluru at 12% and Mumbai at 7%. Prices rose across the markets largely due to launch of higher value properties across the markets pushing the weighted average prices. This upward movement was supported by sustained demand, rising construction and land costs, and an increasing concentration of launches in higher ticket-size categories.
Homes costing INR 1+ Cr make 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.
In contrast, the sub-INR 50 lakh segment recorded a sharp contraction, with sales declining 17% YoY to 73,694 units, accounting for just 21% of total residential transactions in 2025. This represents a significant structural shift when viewed in a medium-term context; for comparison, homes priced below INR 50 lakh accounted for nearly 63% of total sales as recently as 2022. The mid-range segment (INR 50 lakh to INR 1 crore) also witnessed moderation, with volumes declining 8% YoY, reflecting increasing polarisation within the demand spectrum.
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. Supply trends in this segment have largely mirrored subdued buyer interest, indicating an absence of speculative overhang. The underlying drivers of this divergence are multifaceted. At the upper end, improved affordability metrics, rising household incomes, and evolving buyer aspirations have reduced the need for compromise on housing quality, size, and location. As a result, many end-users are opting for better-quality homes at higher ticket sizes, accelerating the shift toward premium and mid-to-premium categories.
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.
Supply dynamics remained active through the year, with residential launches continuing to outpace sales in most cities. While this led to a gradual build-up of unsold inventory, market health indicators remained firm. The quarters-to-sell (QTS) ratio stood at 5.8 quarters, indicating efficient inventory take up and sustained sales velocity despite higher absolute stock levels.
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. Cities such as Chennai and Hyderabad have delivered notable growth, while larger markets like Mumbai and Bengaluru continue to absorb supply steadily despite price appreciation. At the same time, affordable segments remain subdued as prices continue to grow and demand becomes more selective. Overall, manageable inventory levels and low quarters-to-sell underline a market that is active, disciplined, and structurally sound.”
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.
