Indian Housing Market Shows Steady Growth in Q3 2025
Housing sales in India's top eight cities increased by 1% in the July-September quarter, according to Knight Frank. The real estate market continues to show resilience, with demand for residential properties remaining strong.
Real EstateHousing MarketKnight FrankMortgage RatesConsumer ConfidenceReal Estate NewsOct 07, 2025
Releasing its report on the Indian real estate market through a webinar, Knight Frank mentioned that housing sales across eight major cities rose 1 per cent annually to 87,603 units during the third quarter of the current 2025 calendar year. This sustained momentum in sales can be attributed to several factors, including a fall in mortgage rates, high economic growth, and tax incentives introduced in the budget.
The impact of the increase in consumer confidence due to the rationalisation of GST rates from September 22 is yet to be fully reflected in the housing demand. Shishir Baijal, CMD of Knight Frank India, commented, '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.'
The rate cut of up to 100 basis points, along with liquidity support through the simplification of both direct taxes and GST, has collectively strengthened end-user confidence, added Baijal. Despite the positive trends, sales during the first nine months of this year declined one per cent annually to 2,57,804 units across eight major cities compared with the same period last year. These cities include Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Chennai, Hyderabad, Bengaluru, Kolkata, and Ahmedabad.
Gulam Zia, Senior Executive Director of Research, Advisory, Infrastructure, and Valuation at Knight Frank India, stated, 'We are not seeing any signs of demand slowdown as of yet.' He noted that sales have risen marginally during the latest September quarter, despite concerns in the market about the possibility of a demand slowdown. However, Zia pointed out that there have been some 'cracks' in demand for luxury and ultra-luxury homes.
Zia advised developers to consider the development of affordable homes, as there is a limitation of growth potential in the luxury housing segment. This shift towards affordable housing could help sustain the market's momentum and meet the needs of a broader range of buyers.
The Indian real estate market's resilience is a testament to the combined effects of favorable economic policies and consumer confidence. As the market continues to evolve, it will be crucial to monitor how new policies and market trends impact housing demand and supply in the coming quarters.
Frequently Asked Questions
What is the current state of the Indian housing market?
The Indian housing market has shown a 1% increase in sales in the July-September quarter across the top eight cities, indicating sustained momentum and resilience.
Which factors are driving the growth in housing sales?
The growth in housing sales is driven by a fall in mortgage rates, high economic growth, tax incentives, and increased consumer confidence due to GST rate rationalisation.
What are the eight major cities included in the report?
The eight major cities included in the report are Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Chennai, Hyderabad, Bengaluru, Kolkata, and Ahmedabad.
What advice does Knight Frank have for developers?
Knight Frank advises developers to focus on the development of affordable homes, as there is a limitation of growth potential in the luxury housing segment.
What is the outlook for the Indian residential market?
The outlook for the Indian residential market is positive, with the market in its fifth year of an upcycle. However, the year-on-year growth rate is beginning to rationalise, and a prolonged plateau phase may be on the horizon.
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