India's Real Estate Market Soars in 2025: Luxury Demand and Tier-2 Cities Lead the Way
The Indian real estate sector has wrapped up 2025 as one of its most transformational years by far. A high income growth surge, notable infrastructure milestones, and a clear move to premium living have together driven the market to achieve new heights across luxury, mid-segment, and Tier-2 categories.
While Delhi-NCR (specifically Gurugram) has emerged as the nation’s undisputed luxury hub, Lucknow has rewritten the Tier-2 narrative with record-breaking capital appreciation, Pune took the lead in total sales volume, and Mumbai (MMR) maintained its dominance in property registrations and revenue collection.
Gurugram: India’s Luxury Capital
In 2025, the luxury housing segment witnessed a historic bull run. Gurugram spearheaded this movement, with the ₹4–6 crore plus category seeing unprecedented absorption. Rajjath Goel, Managing Director of MRG Group, highlighted the long-term investor confidence in the region, “Gurugram’s position as the number one destination for premium housing sales in 2025 shows it is India’s most trusted realty market. Infrastructure like the Rapid Rail and new expressways has given buyers the confidence that the city will meet both their long-term needs and lifestyle aspirations. Gurugram will remain the biggest driving force for Indian real estate in 2026.”
Emerging Corridors: The New Frontier
The expansion of the National Capital Region has seen the rise of 'New Gurugram' and the Noida-Greater Noida belt as strategic hubs for both end-users and investors. Ashok Singh Jaunapuria, MD & CEO of SS Group, explained the shift, “In Gurugram, areas like New Gurugram are now developing at a rapid pace, witnessing robust demand across both residential and commercial property segments. On one hand, major corporations, co-working spaces, and retail brands are establishing their presence here; on the other, families are increasingly favouring this region due to its superior connectivity, planned layouts, and rapidly improving social infrastructure. This dual momentum is giving the area a significant boost. With a strengthening infrastructure and rising demand, New Gurugram is positioned to be a high-return destination for buyers and investors alike.”
In the Noida region, the focus remained on connectivity-led appreciation. Vishal Sabharwal, Head of Sales at Orris Group, stated, “The Yamuna Expressway and Dwarka Expressway were the twin engines of the 2025 realty market. The presence of the airport, film city, and industrial corridors has provided investors and end-users with secure, high-quality living options. These belts are set to become the primary growth centres for the entire NCR in the coming years.”
Lucknow Revolution: A Tier-2 Powerhouse
A standout highlight of 2025 was the explosive growth of the Lucknow real estate market. Defying national trends, Lucknow emerged as the “Crown Jewel” of Tier-2 cities, recording a spectacular 48% jump in sales value and a 25% surge in residential unit sales. The city’s transformation is fueled by a “connectivity multiplier,” with the Purvanchal Expressway, the Lucknow-Kanpur (Awadh) Expressway, and the Outer Ring Road unlocking massive value. Micro-markets like Sultanpur Road and Amar Shaheed Path have transitioned into premium residential corridors, seeing annual capital appreciation exceeding 20%. This infrastructure-led boom, combined with the expansion of the Lucknow Metro and the new International Airport Terminal, has made the city a primary destination for both high-net-worth investors and aspirational homebuyers.
Preksha Singh, CEO of Agrasheel Infratech, elaborated on this shift, “Lucknow’s growth story has decisively moved outward, and the expressways have been the biggest catalysts. Locations like Sultanpur Road and Shaheed Path are becoming well-planned, livable neighbourhoods with schools, parks, healthcare, and retail evolving in sync. Homebuyers want more than a house now; they want breathing room, seamless mobility, and everyday conveniences. As developers, we see it as our responsibility to design homes that reflect this new urban mindset, bringing comfort, safety, sustainability, and affordability together to create genuinely future-ready communities.”
Geographic Expansion and Policy Impact
The year 2025 also marked a shift in buyer behaviour, influenced heavily by improved affordability and the rise of satellite cities within the NCR. Paras Rai, Co-Founder & Managing Director of Property Master, explained the evolving depth of the market: “In 2025, we saw how NCR’s real estate market evolved in both depth and geography. Gurugram continued to dominate in luxury, while Faridabad demonstrated steady demand in mid-to-premium housing. Meanwhile, Tier-II cities like Mohali matched buyer intent, driven by infrastructure. What stood out was buyer discernment: decisions were guided by connectivity and long-term value. Furthermore, the RBI’s cumulative 125 basis points rate cut helped liquidity and affordability, enabling more buyers to act. Looking ahead to 2026, NCR will attract serious investors seeking stable, well-planned developments.”
Pune and Mumbai: The Engines of Volume and Value
According to the CREDAI-CRE Matrix H1-2025 report, Pune led the nation in unit sales, recording a staggering 44,000 homes sold in the first half of the year. The city’s robust IT sector and stable EMI capacity among young professionals have made it the top choice for first-time buyers. Simultaneously, Mumbai (MMR) broke registration records. Despite being the most expensive market, the demand for ownership in the financial capital remains inelastic, with stamp duty collections reaching all-time highs in 2025.
Tier-2 Surge: Indore and Beyond
After Lucknow, Indore was also a major winner, as the number of property registrations increased by more than 40% during just November 2025. It is the combination of clean city infrastructure, metro expansion, and industrial growth that has turned Indore into a leading property hub instead of a secondary market. The year 2025 has been a game changer for the Indian real estate narrative. The demand for luxury housing has never been higher, infrastructure is the main enabler, and Tier-2 cities like Lucknow are going mainstream with record growth. These are the factors that have brought the real estate sector to 2026 with a strong momentum and a balanced demand-supply equation.
