Premium Homes Lead India's Housing Market Surge in Q3
India’s housing market is witnessing a significant shift towards premium properties. Despite flat sales volumes, the total transaction value surged by 14% in the third quarter, driven by strong demand for luxury homes.
Housing MarketPremium HomesReal EstateTransaction ValueRegional GrowthReal Estate NewsOct 15, 2025
According to PropTiger.com’s Real Insight Residential: July–September 2025 report, the value of home sales jumped 14% year-on-year to ₹1.52 lakh crore in the third quarter, even though the volume of units sold dipped slightly by 1% to 95,547 across eight key markets.
This widening gap between value and volume underscores a powerful market transformation — away from broad-based, mass-market recovery towards a more value-driven, premium segment boom. Developers, too, appear to be aligning their strategies to match this buyer sentiment, focusing on fewer but higher-ticket projects.
“The Indian residential market is clearly transitioning to a more mature and sustainable phase of value-led growth,” said Onkar Shetye, Executive Director, Aurum PropTech. “The premium segment remains the primary growth engine, supported by stable macroeconomic fundamentals and strong buyer sentiment.”
Luxury and premium homes take centre stage
The preference for premium homes — often priced above ₹1 crore and featuring larger layouts and branded amenities — has become more pronounced as urban professionals and investors seek long-term assets amid steady interest rates and economic resilience.
Shetye said that favorable conditions, including a recent GST reduction on cement and continued rate stability, have provided a “crucial buffer against rising input costs,” bolstering both developer confidence and consumer buying power.
While overall sales volumes have steadied, the rise in average ticket sizes has pushed total transaction values sharply higher. Industry experts attribute this to a blend of aspirational home upgrades, strong demand for better-located inventory, and developers’ sharper focus on quality over quantity.
South leads, west slows
The PropTiger report paints a picture of regional contrasts. Southern cities — particularly Chennai, Hyderabad, and Bengaluru — led the growth, while traditional powerhouses like the Mumbai Metropolitan Region (MMR), Pune, and Delhi-NCR saw moderation.
Chennai emerged as the standout performer, recording an astonishing 121% year-on-year jump in sales to 7,862 units, driven by strong end-user demand and improved project supply.
Hyderabad followed closely with 52.7% growth, selling 17,658 units in the quarter.
Bengaluru, India’s tech capital, recorded a 17.6% rise with over 13,100 units sold, supported by robust white-collar employment and steady mid-to-premium demand.
In contrast, MMR — still India’s largest housing market — saw a 22.2% decline in sales to 23,334 units, while Pune dropped 27.9% and Delhi-NCR fell 21.2% year-on-year.
Despite these dips, MMR retained its dominance, accounting for nearly a quarter (24.4%) of all home sales, followed by Hyderabad (18.5%), Bengaluru (13.7%), and Pune (13.6%).
“This regional divergence highlights how newer, more affordable southern markets are becoming the growth engines of India’s housing cycle,” said a senior PropTiger analyst. “The West, while large, is facing affordability pressures and inventory correction, especially in mid-market segments.”
Developers launch fewer, pricier projects
Developers appear to be recalibrating their pipelines in favor of higher-value projects. New launches across top eight cities dropped 5.1% YoY to 91,807 units, suggesting a measured supply response.
However, sequential data shows a 3.6% quarter-on-quarter increase, signaling that developers are selectively re-entering the market with premium offerings ahead of the festive season.
Cities such as Kolkata and Chennai witnessed a dramatic revival in supply:
• Kolkata’s new launches soared 387.7% YoY, while Chennai’s doubled (up 105%), reflecting strong confidence in their demand potential.
• Meanwhile, Hyderabad’s new supply grew 46.6%, and Pune’s rose 26.7%, both in sync with rising premium demand.
• In contrast, Delhi-NCR and Bengaluru saw sharp declines in new project launches — down 55.7% and 57.8% respectively — as developers focused on clearing existing inventory and maintaining pricing discipline.
Festive quarter seen as key demand litmus test
Market watchers expect the October–December quarter to be pivotal, as it coincides with India’s festive buying season — traditionally the strongest period for property sales.
“Strong end-user sentiment and renewed developer focus on quality are likely to sustain the momentum,” said Shetye. “But affordability pressures in the mid-income segment could emerge as a balancing factor.”
For now, the premium and upper-mid segments are driving not just pricing power but also confidence across India’s residential ecosystem.
Frequently Asked Questions
What is the primary driver of the increase in transaction value in India's housing market?
The primary driver of the increase in transaction value is the shift towards premium and luxury homes, which are often priced above ₹1 crore and feature larger layouts and branded amenities.
Which cities saw the most significant growth in home sales in Q3?
Chennai emerged as the standout performer with a 121% year-on-year jump in sales, followed by Hyderabad with 52.7% growth, and Bengaluru with a 17.6% rise.
Why are developers launching fewer but pricier projects?
Developers are launching fewer but pricier projects to align with the growing demand for premium homes and to maintain pricing discipline in the market.
What regional trends are observed in India's housing market?
Southern cities like Chennai, Hyderabad, and Bengaluru are leading the growth, while traditional powerhouses like the Mumbai Metropolitan Region (MMR), Pune, and Delhi-NCR have seen a decline in sales.
What is the significance of the October–December quarter for the housing market?
The October–December quarter is significant as it coincides with India’s festive buying season, which is traditionally the strongest period for property sales.
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