Rs 1-Crore Homes Dominate India's Housing Market in 2025

India’s residential real estate market maintained strong momentum in 2025, with home sales across the top eight cities touching over 3.48 lakh units, despite a marginal 1% year-on-year decline, according to Knight Frank India’s latest report, India Real Estate: Office and Residential Market – July to December 2025 (H2 2025).

Notably, H2 2025 sales stood at 1.78 lakh units, making it the highest second-half performance since 2013, underlining the sector’s resilience even as price appreciation and supply dynamics evolved across markets.

Mumbai continued to dominate India’s residential landscape, accounting for 29% of total sales in 2025 with 97,188 units sold, registering a 1% YoY growth. Sales in the city were stronger in the second half, rising 3% YoY, despite rising prices and limited land availability. Bengaluru remained stable with sales of 55,373 units, supported by steady end-user demand, while Chennai stood out with a 12% YoY rise in residential sales.

In contrast, the National Capital Region (NCR) saw a 9% YoY decline in sales to 52,373 units, largely due to a high base and selective activity in premium corridors. Pune also witnessed a mild 3% contraction, while Hyderabad and Ahmedabad posted modest growth, reflecting regional variations in demand and supply dynamics.

Residential prices continued their upward trajectory in 2025, driven by higher land and construction costs and a greater share of premium launches. Weighted average prices rose across all major markets, led by NCR with a sharp 19% YoY increase, followed by Hyderabad (13%), Bengaluru (12%), and Mumbai (7%).

Knight Frank noted that the rise in prices was largely influenced by the increasing concentration of launches in higher-ticket segments, pushing up city-level averages even as volumes remained steady.

A defining trend in 2025 was the growing dominance of premium housing. Homes priced above Rs 1 crore accounted for nearly 50% of total residential sales, with 1.75 lakh units sold, marking a 14% YoY increase. In contrast, the affordable segment—homes priced below Rs 50 lakh—saw sales decline 17% YoY, accounting for just 21% of total transactions, down sharply from nearly 63% as recently as 2022.

The mid-income segment (Rs 50 lakh–Rs 1 crore) also saw moderation, reflecting increasing polarisation in buyer preferences. Knight Frank attributed this shift to improved affordability at the higher end, rising household incomes, and changing aspirations, prompting buyers to upgrade to larger and better-located homes.

Despite new launches continuing to outpace sales, overall market health remained stable. Unsold inventory across the top eight cities rose just 3% YoY to around 5.1 lakh units, while the quarters-to-sell (QTS) ratio remained steady at 5.8 quarters, signalling efficient absorption and disciplined supply additions.

Markets such as Pune, Chennai, and Bengaluru maintained relatively lower QTS levels, indicating faster inventory churn, while NCR and Ahmedabad continued to face relatively higher supply overhangs.

Commenting on the trends, Shishir Baijal, Chairman and Managing Director, Knight Frank India, said the residential market has entered a phase of consolidation at elevated levels, supported by strong end-user demand and healthy household balance sheets. He noted that while rapid volume expansion may be limited going forward, the sector remains structurally sound as it moves into 2026.

Echoing this view, Gulam Zia, Senior Executive Director – Research, Knight Frank India, highlighted that premium housing now dominates market activity, while affordable segments continue to face structural challenges related to pricing, credit access, and supply viability.

Looking ahead, Knight Frank expects stable absorption, selective price appreciation, and disciplined supply additions to define the residential market in 2026. While volumes may not replicate the peaks of the past two years, the continued strength in premium segments is likely to support overall market stability, even as affordability constraints weigh on lower-priced housing categories.