Mumbai Dominates India's Housing Market in 2025; Office Leasing Reaches Decade-High
Mumbai has once again proven its dominance in India's real estate sector, particularly in the residential and office markets. According to Knight Frank India's latest report, the city closed the year with significant achievements in both residential sales and office leasing, despite some challenges.
In its India Real Estate: Office and Residential Market, July-December 2025 (H2 2025) report, Knight Frank India revealed that Mumbai recorded 9.8 million square feet of office leasing in 2025. This figure, although a 5 per cent year-on-year decline, still makes 2025 the second-strongest year for commercial absorption in over a decade. The second half of the year saw 4.3 million square feet of leasing, driven by large transactions in scalable suburban locations.
Global Capability Centres (GCCs) emerged as the primary demand driver, with their share of office leasing increasing sharply from 9 per cent in H2 2024 to 27 per cent in H2 2025. This growth was led by BFSI (Banking, Financial Services, and Insurance), technology, and engineering firms. India-facing occupiers remained the largest segment, accounting for 40 per cent of leasing, although this was a significant drop from the 72 per cent share recorded a year earlier.
Third-party IT and ITeS (Information Technology and Information Technology-Enabled Services) firms also expanded their presence, contributing 20 per cent to the leasing activity. These firms primarily chose cost-efficient suburban hubs such as Andheri East, Goregaon, Airoli, and Thane. Rental values continued to rise, with average transacted rents increasing by 6 per cent year-on-year to Rs 125 per square foot per month. This was supported by quality-driven demand and limited new supply. Vacancy levels remained stable at 18.3 per cent, even as new completions decreased by 12 per cent annually.
Gulam Zia, International Partner, Senior Executive Director, Research, Advisory, Infrastructure, and Valuation at Knight Frank India, commented, 'Mumbai's office market continues to demonstrate long-term stability, with 2025 recording the second-highest annual leasing volume in over a decade. The most compelling story is the rapid rise of GCCs, whose market share nearly tripled this year as global firms leverage Mumbai's deep talent pool for high-end analytics and shared services.'
On the residential front, Mumbai saw an annual home sales figure of 97,188 units, marking a 1 per cent year-on-year increase. Sales in H2 2025 rose by 3 per cent to 50,153 units. Average residential prices climbed by 7 per cent annually to Rs 8,856 per square foot, reflecting steady end-user demand and controlled supply.
Knight Frank noted a visible shift in demand from the affordable housing segment to higher ticket sizes, particularly in the Rs 2-5 crore category. Improved infrastructure connectivity, including the operationalisation of Metro Line 3 and the Mumbai Trans Harbour Link, continued to support demand in peripheral and suburban markets, the report added.
Overall, Mumbai's real estate market in 2025 showcased resilience and growth, driven by a combination of robust demand, improved infrastructure, and strategic investments in both residential and commercial sectors.
