Home sales fall 9% in Q3 2025, but luxury demand pushes housing market value up 14%

India’s residential real estate market entered a new phase in the third quarter of 2025, marked by a sharp divergence between volumes and values. Even as overall home sales dipped, the appetite for premium and luxury housing surged. According to ANAROCK’s PAN-India Residential Market Viewpoints report for Q3 2025, sales across the top seven cities slipped 9% year-on-year to around 97,100 units, but the total sales value jumped 14% to nearly Rs 1.52 lakh crore. This clear value–volume gap signals the sector’s ongoing structural shift toward high-ticket housing driven by affluent end-users and wealthier households.

Developers too mirrored this sentiment in their launch strategies. Luxury homes priced above Rs 1.5 crore accounted for 38% of all new launches, the highest share across categories. Overall new supply rose 3% year-on-year to 96,700 units, led primarily by the Mumbai Metropolitan Region (31%) and Pune (20%), underscoring the continued dominance of western markets in premium launches.

Prices continued to move upward, though at a more measured pace compared to the steep inflation of recent years. Average residential prices across major cities expanded 9% annually to Rs 9,105 per sq ft. The NCR clocked a striking 24% rise, driven by infrastructure expansion and demand across emerging corridors. Bengaluru followed at 10%, while most other markets saw moderate increases. On a sequential basis, prices rose just 1%, hinting that the market may be entering a period of stabilisation after two years of aggressive price growth.

Industry leaders believe this shift is structural rather than cyclical. Akshay Taneja, CEO, TDI Infrastructure, said NCR’s 24% annual rate jump reflects “a shift toward value-centric growth in high-potential corridors.” He noted that even with a fall in overall unit sales nationwide, sales value rising 14% shows “price appreciation is outpacing consumption.” He added that NCR’s 19-month inventory overhang is an important reminder that investors must factor realistic exit timelines in a fast-appreciating market. According to him, early buyers in master-planned, developer-driven corridors continue to enjoy lifestyle upgrades along with superior ROI potential.

Vishal Raheja, Founder & MD, InvestoXpert Advisors, said the NCR’s price surge is “a structural recalibration in demand, supply discipline and infrastructure-led value creation.” He highlighted that markets such as the Yamuna Expressway, Dwarka Expressway, Greater Noida West, and emerging Gurugram micro-markets are witnessing new buyer behaviour. “People are willing to pay a premium for certainty, connectivity and community,” he said, adding that projects with assured timelines and integrated amenities are selling up to 35% faster than legacy standalone developments. The market, he said, has entered a maturity curve where “returns are driven by disciplined planning, not sentiment.”

Residential inventory remained largely stable at 5,61,750 units, unchanged from both Q2 2025 and Q3 2024, signalling a more disciplined supply environment. Gurgaon stood out as one of the strongest-performing markets. Saransh Trehan, Managing Director, Trehan Group, said the city has evolved into a “modern real estate powerhouse,” with growing demand in corridors such as SPR, New Gurgaon and Sohna. With rising incomes, improved connectivity and growing preference for secure communities, he expects steady expansion heading into 2026.

Inventory overhang data revealed a clear hierarchy of market strength. Bengaluru remained the healthiest with 12 months of overhang, followed by Pune at 15 months and MMR at 17 months. NCR’s 19-month figure pointed to mismatches between supply and demand. Chennai and Kolkata recorded overhangs of 20 and 21 months, respectively, while Hyderabad topped the list at 26 months, reflecting ongoing supply saturation and price sensitivity.

Overall, Q3 2025 reflects a sector in transition—premium-heavy, price-resilient, and increasingly supply-disciplined—setting the foundation for a more balanced growth cycle as the market moves toward 2026.