Home Sales See Modest Growth in Major Indian Cities, Mumbai and Chennai Lead
According to the India Real Estate Market Update for Q3 2025 by Knight Frank India, the residential market showed a one percent increase in sales, with Mumbai and Chennai leading the surge.
Real EstateHome SalesMumbaiChennaiGst Rate RationalisationReal Estate MumbaiOct 07, 2025
According to the India Real Estate Market Update for Q3 2025, the residential market remained stable, with 87,603 housing units sold during the quarter — up 1 per cent from a year ago. Mumbai led the pack with 24,706 units sold, while Chennai recorded the fastest growth at 12 per cent, marking its best performance since the COVID-19 pandemic. Sales declined only in Pune, which registered an 8 per cent fall.
Lower inflation and rate cuts have lifted homebuyer sentiment. India’s inflation eased to 2.07 per cent in August 2025 from 3.65 per cent a year ago, while the repo rate was a full percentage point (100 bps) lower than at the end of 2024. Knight Frank India said sales data from the ongoing festive quarter will provide a clearer picture of market trends. The consultant added that strong economic growth and tax incentives in the Budget have helped sustain demand, while the impact of improved consumer confidence following the GST rate rationalisation on September 22 is yet to be seen.
India’s residential market in Q3 (July-September 2025) has demonstrated an impressive ability to sustain momentum, and the market is now in its fifth year of an upcycle. Consequently, the Y-o-Y (year-on-year) growth rate is beginning to rationalise, and we may be entering a prolonged plateau phase, said Knight Frank India CMD Shishir Baijal.
Nevertheless, during the first nine months of this year, the sales declined one per cent annually to 2,57,804 units across eight major cities compared with the same period last year. These eight cities are Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Chennai, Hyderabad, Bengaluru, Kolkata, and Ahmedabad.
We are not seeing any signs of demand slowdown as of yet, said Gulam Zia, Senior Executive Director, Research, Advisory, Infrastructure, and Valuation, Knight Frank India. As per a report by PTI, he said the sales have risen marginally during the latest September quarter, despite concerns in markets about the possibility of a demand slowdown.
Zia, however, pointed out that there have been some “cracks” in demand for luxury and ultra-luxury homes. He advised developers to consider the development of affordable homes, as there is a limitation of growth potential in the luxury housing segment.
Frequently Asked Questions
Which cities saw the highest increase in home sales in Q3 2025?
Mumbai and Chennai saw the highest increase in home sales in Q3 2025, with Mumbai leading the pack and Chennai recording the fastest growth at 12 percent.
What factors contributed to the increase in home sales?
Lower inflation and interest rates, strong economic growth, and tax incentives in the Budget contributed to the increase in home sales.
What is the current status of the luxury housing market?
There have been some 'cracks' in demand for luxury and ultra-luxury homes, according to Knight Frank India, suggesting a limitation in growth potential in this segment.
What advice do experts have for developers?
Experts advise developers to focus on the development of affordable homes, as the luxury housing segment has limited growth potential.
How has the GST rate rationalisation impacted the housing market?
The impact of the GST rate rationalisation on September 22 is yet to be fully seen, but it is expected to improve consumer confidence and potentially boost demand.
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