India’s residential housing market continues to demonstrate resilience and relative outperformance against global peers, supported by firm domestic demand, improving affordability and a stable macroeconomic environment, according to Knight Frank’s Global House Price Index Q3 2025 and India Real Estate: Office and Residential Market – H2 2025.

Globally, annual house price growth strengthened modestly to 2.4% in Q3 2025 as central banks pivoted decisively towards monetary easing. India ranked among the top ten global markets, recording a 9.6% year-on-year increase in residential prices, significantly outperforming the global average and underscoring the depth of end-user demand in the country’s housing market.

Residential sales across India’s top eight cities remained steady in 2025 at over 348,000 units, with H2 2025 volumes reaching their highest level since 2013. Market health indicators remained balanced, with the quarters-to-sell ratio holding at 5.8 quarters, despite a rise in unsold inventory driven largely by higher-value project launches.

Price growth was broad-based across major cities, led by the National Capital Region, where prices rose 19% year-on-year, followed by Hyderabad (13%), Bengaluru (12%) and Mumbai (7%). This upward movement reflects sustained traction in premium and mid-to-premium housing, supported by cumulative interest-rate cuts, benign inflation and rising household incomes.

A notable structural shift continued through 2025, with homes priced above INR 1 crore accounting for around 50% of total residential sales, highlighting evolving buyer preferences towards larger, better-quality homes and well-located developments. Developers have responded by moderating launch volumes, prioritising execution and offering targeted financing incentives rather than price corrections, helping maintain absorption momentum.

Commenting on the outlook, Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said, “India’s housing market continues to stand apart in a global environment that remains uneven. The combination of strong economic growth, easing financial conditions and a decisive shift towards end-user-led demand has created a more mature and resilient residential cycle. As we move into 2026, we expect the market to be defined by stable absorption, selective price appreciation and disciplined supply, rather than speculative excess.”

With global monetary conditions turning more supportive and India’s economic fundamentals remaining robust, the residential sector is well positioned to sustain its outperformance in the period ahead.

Global market performance

Across global housing markets, price growth strengthened modestly in Q3 2025 as easing monetary conditions began to feed through to demand. Emerging and select European markets dominated the upper end of the rankings, led by Turkey, where nominal prices rose sharply despite real growth remaining constrained by elevated inflation. North Macedonia and Portugal also recorded strong annual gains, reflecting continued momentum in smaller, supply-constrained European markets. In contrast, several mature markets continued to lag, with price declines persisting in parts of Northern Europe and East Asia, underscoring the uneven nature of the global housing recovery.

Global outlook

Looking ahead, the outlook for global housing markets is cautiously improving. The broad pivot by central banks towards rate cuts is easing borrowing costs and supporting buyer sentiment across an increasing number of markets. However, real price growth remains under pressure in many countries, as inflation continues to erode affordability. As a result, the next phase of recovery is likely to be gradual rather than uniform, with performance increasingly shaped by local economic resilience, policy support and supply dynamics rather than a broad-based global upswing.

“Nominal growth has edged higher again as central banks pivot towards cuts, but real gains are still hard‑won. To see firmer growth into 2026, policymakers will need to maintain an easing while inflation continues to retreat,” said Liam Bailey, Knight Frank’s Global Head of Research.