Indian Housing Market Stabilizes with Surge in Demand for Compact Homes
New Delhi: Magicbricks' PropIndex report for July–September 2025 highlights a shift towards compact and mid-segment housing, with demand for 1-2 BHK units surging to 54%. Prices in major cities like Pune and Mumbai show significant YoY growth.
Real EstateHousing MarketCompact HomesPropindexMagicbricksReal Estate PuneOct 06, 2025
While overall supply grew modestly by 1% QoQ (–4.5% YoY), prices continued to rise across major markets. Pune (+41.4% YoY), Mumbai (+29.6% YoY), and Greater Noida (+27.3% YoY) recorded the sharpest annual price appreciation. The demand for under-construction homes outpaced that for ready-to-move units, with UC prices in Pune rising by 29.1% QoQ, compared to 15.8% for RM homes.
Regionally, the Delhi NCR market saw a significant surge in demand, with Delhi leading the pack at +10.3% QoQ, followed by Noida (+6.3% QoQ) and Greater Noida (+3.8% QoQ). This growth can be attributed to large-scale infrastructure projects such as the Dwarka Expressway and RRTS corridors. The Mumbai Metropolitan Region (MMR) also witnessed resilient buyer activity, despite supply contractions in Mumbai (–9.7% QoQ) and Navi Mumbai (–10.7% QoQ). This supply constraint has fueled significant price momentum. In the South, Bengaluru maintained its growth trajectory with demand up +5.9% QoQ and prices rising +3.9% QoQ. In contrast, Chennai experienced a –5.4% QoQ dip in demand, even as fresh launches lifted supply by +1.9% QoQ.
Sudhir Pai, CEO of Magicbricks, commented, “The July–September 2025 quarter reinforced a fundamental market shift towards compact and mid-segment housing. While affordability constraints are shaping buyer behavior, infrastructure-led optimism and evolving consumer aspirations continue to fuel demand across key micro-markets. Developers who align product offerings with affordability and lifestyle needs will define the next phase of sustainable housing growth.”
The PropIndex Q3 2025 findings indicate that India’s residential market is entering a phase of measured growth, driven by affordability, infrastructure expansion, and evolving buyer aspirations. As compact homes gain popularity and under-construction projects command premiums, the balance between demand and supply will be crucial in sustaining momentum. Looking ahead, housing activity is expected to be driven less by speculative trends and more by pragmatic, end-user decisions, positioning real estate as a stable and enduring investment class.
Frequently Asked Questions
What is the PropIndex report?
The PropIndex report is a quarterly publication by Magicbricks, India’s leading real estate platform, that provides insights into the trends and dynamics of the Indian housing market.
Why is there an increase in demand for 1-2 BHK units?
The increase in demand for 1-2 BHK units is primarily due to affordability constraints. Buyers are gravitating towards smaller, more affordable homes to manage the rising costs of living.
Which cities are leading in price appreciation?
Pune, Mumbai, and Greater Noida are leading in price appreciation, with annual growth rates of +41.4%, +29.6%, and +27.3% respectively.
What role do infrastructure projects play in the housing market?
Infrastructure projects such as the Dwarka Expressway and RRTS corridors in Delhi NCR are boosting demand and driving growth in the housing market by improving connectivity and quality of life.
What does the future of the Indian housing market look like?
The future of the Indian housing market is expected to be driven by pragmatic, end-user decisions, with a focus on affordability and lifestyle. The market is likely to see a continued shift towards compact homes and under-construction projects.
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