Premium Homes Priced Rs 1–2 Crore Dominate Indian Housing Market: Knight Frank Report
India's housing market maintained steady growth in Q3 2025, driven by strong demand for premium homes priced between Rs 1–2 crore. The top eight cities recorded a total of 87,603 housing units sold, with NCR leading in price appreciation.
Indian Housing MarketPremium HomesReal EstateKnight Frank IndiaResidential SalesReal Estate NewsOct 08, 2025
The report highlighted that the top eight residential markets recorded total sales of 87,603 housing units in Q3 2025, marking a modest 1% year-on-year (YoY) increase despite expectations of a correction.
New launches, however, witnessed a slight dip of 2% YoY, totaling 88,655 units during the quarter. Meanwhile, residential prices rose across all major cities, with NCR leading the pack with 19% YoY appreciation, followed by Bengaluru (15%), Hyderabad (13%), and Chennai (9%).
The steady performance of India’s housing sector comes against a favourable macroeconomic backdrop. Inflation eased to 2.07% in August 2025, compared to 3.65% a year ago, while the Reserve Bank of India (RBI) revised its FY26 GDP forecast to 6.8%.
A 100 basis point reduction in the repo rate compared to end-2024 also improved liquidity and boosted consumer sentiment.
According to Shishir Baijal, Chairman and Managing Director, Knight Frank India, the Indian residential market has shown remarkable resilience.
“India’s residential market in Q3 2025 has demonstrated an impressive ability to sustain momentum and is now in its fifth year of an upcycle. The YoY growth rate is beginning to rationalise, and we may be entering a prolonged plateau phase. The surge in demand for premium housing has emerged as a key driver, reflecting the evolving aspirations of urban buyers for larger and higher-quality homes,” Baijal said.
Among cities, Mumbai maintained its dominance with 24,706 units sold in Q3, contributing 28% of total sales and registering a 2% YoY rise. Chennai was the standout performer, recording a 12% YoY jump— its highest quarterly sales since the pandemic — with 4,617 units sold.
Other major markets, including NCR (12,955 units) and Bengaluru (14,538 units), held steady, while Pune witnessed an 8% YoY decline in residential sales. Year-to-date (YTD) data showed an aggregate of 2.58 lakh units sold, only marginally lower (-1%) than last year.
The premium housing segment (homes priced above ₹1 crore) continued to strengthen its hold on the market, accounting for 52% of total sales in Q3 2025 — up from 46% in the same period last year.
Notably, the Rs 1–2 crore price band emerged as the largest contributor, representing 28% of total sales and recording a robust 17% YoY growth.
In contrast, homes priced below Rs 1 crore saw a decline, with the sub-Rs 50 lakh segment dropping 16% YoY.
The luxury and ultra-luxury segments also witnessed strong growth on a smaller base, with homes priced between Rs 10–20 crore registering a 170% surge in sales compared to last year.
Gulam Zia, Senior Executive Director – Valuation, Advisory and Research, Knight Frank India, noted that the structural shift toward higher-value homes underscores the market’s changing dynamics.
“Premium housing has decisively taken centre stage, accounting for more than half of all sales this quarter. The strength of the ₹1–2 crore segment, now the largest by volume, reaffirms the market’s ability to adjust and grow within a healthy, sustainable framework,” Zia said.
On the supply side, new residential launches stood at 88,655 units, slightly lower by 2% YoY. Chennai (+44%) and Bengaluru (+28%) led growth in new launches, while Mumbai and NCR witnessed notable declines of 19% each, dragging overall supply numbers.
The market’s health indicator—Quarters to Sell (QTS)—remained stable at 5.8 quarters, or roughly 18 months of inventory, signaling a well-balanced market. Although unsold inventory rose 4% YoY to 5.06 lakh units, Knight Frank highlighted that sustained sales velocity over the past eight quarters reflects enduring end-user demand.
Price growth remained strong across all major markets, supported by robust demand in the premium segment.
NCR: +19% YoY
Bengaluru: +15% YoY
Hyderabad: +13% YoY
Chennai: +9% YoY
Kolkata: +8% YoY
Mumbai: +7% YoY
Despite stable sales volumes, the steady upward trajectory in prices reflects developers’ confidence and buyers’ willingness to pay a premium for quality housing amid limited fresh supply.
The Knight Frank India report concludes that India’s housing market is entering a plateau phase—characterised by stable volumes, steady price appreciation, and growing appetite for premium homes. As liquidity improves and interest rates remain benign, the sector’s resilience is expected to continue, with the ₹1–2 crore segment likely to stay at the forefront of housing demand.
Frequently Asked Questions
What is the key growth driver in India’s housing market in Q3 2025?
The key growth driver in India’s housing market in Q3 2025 is the strong demand for premium homes, particularly those priced between Rs 1–2 crore.
How did residential prices perform across major cities in Q3 2025?
Residential prices rose across all major cities, with NCR leading the pack with a 19% YoY appreciation, followed by Bengaluru (15%), Hyderabad (13%), and Chennai (9%).
Which city maintained its dominance in Q3 2025 residential sales?
Mumbai maintained its dominance with 24,706 units sold in Q3, contributing 28% of total sales and registering a 2% YoY rise.
What is the significance of the Rs 1–2 crore price band in the housing market?
The Rs 1–2 crore price band emerged as the largest contributor, representing 28% of total sales and recording a robust 17% YoY growth, indicating a strong demand for higher-value homes.
What does the Knight Frank India report predict for the future of India’s housing market?
The Knight Frank India report predicts that India’s housing market is entering a plateau phase characterized by stable volumes, steady price appreciation, and growing appetite for premium homes, with the ₹1–2 crore segment likely to stay at the forefront of housing demand.
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