The Indian residential real estate market displayed remarkable resilience in 2025, absorbing significant price increases with only a marginal dip in sales volume. According to the latest report from global real estate consultant Knight Frank India, housing sales across eight major cities declined by a modest 1% during the calendar year, settling at 3,48,207 units. This stagnation in demand occurred against a backdrop of a substantial rise in weighted average prices, which climbed by as much as 19% in some markets.
Economic Tailwinds Counter Price Pressures
Shishir Baijal, Chairman & Managing Director of Knight Frank India, addressed the trends in a virtual press conference held on Wednesday, January 7. He noted that the sales momentum was sustained despite the price hikes, crediting supportive macroeconomic factors. Declining home loan interest rates, robust economic growth, and lower inflation were identified as key elements that bolstered buyer sentiment and helped the market withstand fears of a potential correction.
Baijal also highlighted a significant shift in buyer demographics, revealing that the contribution of Non-Resident Indians (NRIs) to housing sales has surged to 12-15%, up from single-digit figures just a decade ago. This underscores the growing appeal of Indian real estate as an investment and homeland asset for the diaspora.
City-Wise Performance: A Mixed Bag
The report, which focuses solely on the primary residential market, revealed starkly different stories across India's top urban centers. The performance was highly varied, with some cities recording growth while others saw declines.
Mumbai, the country's financial capital, saw sales inch up by 1% to 97,188 units, with average prices rising 7% to ₹8,856 per square foot. Bengaluru's sales remained virtually flat at 55,373 units, but prices appreciated sharply by 12% to ₹7,388 per sq ft.
In contrast, Delhi-NCR witnessed one of the steepest sales declines at 9%, with only 52,452 units sold. However, it also led in price appreciation with a 19% jump, pushing the average rate to ₹6,028 per sq ft. Pune and Kolkata both experienced a 3% fall in sales.
On the positive side, Hyderabad and Chennai emerged as strong performers. Hyderabad posted a 4% growth in sales (38,403 units) with a 13% price rise. Chennai led in sales growth with an impressive 12% increase to 18,262 units, coupled with a 7% price hike.
Market Outlook and Implications
The 2025 data paints a picture of a maturing market where price sensitivity is becoming more pronounced. The ability of markets like Mumbai and Hyderabad to grow sales despite price increases suggests underlying demand strength, possibly driven by job creation and infrastructure development. The sharp price rise in Delhi-NCR, coupled with a sales drop, indicates a potential affordability barrier.
The rising NRI investment is a crucial buffer, bringing in foreign currency and demand that is less sensitive to local economic cycles. For the domestic buyer, the combination of lower home loan rates and positive economic indicators provided the confidence to transact, even at higher price points.
This Knight Frank report underscores a pivotal phase for Indian real estate, where growth is becoming more qualitative and segmented, heavily influenced by city-specific dynamics and the evolving profile of the Indian homebuyer.
