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India's real estate sales rose 1% year-on-year to 87,603 units from July-September, according to Knight Frank
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Mumbai had the most sales at 24,706 units, up 2% YoY; Chennai's sales grew most with 12% YoY with 4,617 units
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New launches totalled 88,655 units, 2% lower than the previous quarter
India's real estate sector sustained its momentum in Q3 2025, buoyed by a stable economic backdrop, falling inflation and a supportive interest rate environment, according to Knight Frank’s latest market performance report.
Inflation eased to 2.07% in August from 3.65% a year earlier, and the Reserve Bank of India raised its FY 2026 GDP growth forecast to 6.8%. Lower borrowing costs — repo rates a full percentage point below end-2024 levels — have helped preserve buyer sentiment across most markets.
Between July and September 2025, 87,603 housing units were sold nationwide, marginally up 1% year-on-year (Y-o-Y). The highest sales volumes were recorded in Mumbai at 24,706 units, 2% higher in Y-o-Y terms.
Chennai registered the sharpest jump, up 12% Y-o-Y to 4,617 units, the highest since the pandemic. Interestingly, sales have remained stable or grown marginally across all markets with the exception of Pune, which witnessed a decline of 8% Y-o-Y in Q3 2025.
The stable economic backdrop, with lower inflation and the repo rate at a full percentage point lower than at the end of 2024, have played their role in supporting sentiments in the residential market.
Photo: Frank Knight
Photo: Frank Knight
Supply Outpaces Demand
The steady growth in demand was surpassed by the volume of units launched, exceeding sales for the past 12 quarters. As many 88,655 units were launched in Q3 2025, a 2% drop over the previous period. The Chennai and Bengaluru markets saw the highest growth in units launched during the quarter at 44% and 28% YoY respectively.
Mumbai and the NCR saw a significant drop in the volume of units launched at 19% YoY each and were instrumental in limiting the overall tally during the quarter.
While price growth has sustained, developers have increasingly begun to offer financing options such as bank and developer subvention schemes in order to push sales.
Market Shifts Towards Premium Housing
The sales of units priced over Rs 1 crore have grown by 13% YoY, compared to the 16% and 5% YoY decline in the Rs 50 lakh and Rs 50-lakh-to-Rs 1-crore segments respectively.
This growth in sales is apparent in most of the ticket sizes above Rs 1 crore, with the largest segment of Rs 1-2 crore growing by 17% YoY. Sales in the Rs 1-2-crore segment constituted 28% of the total volume.
Inventory Build-up and QTS Stability
The inventory accumulation has been most visible in the Rs 2-5 crore segment. However, with the QTS holding steady at around four quarters, the inventory levels here remain comfortably aligned with demand.
The picture is more nuanced in the luxury and super-luxury categories. The absolute scale of these segments is small, together accounting for fewer than 1,500 units.
Consequently, even modest variations in supply or transaction activity can cause disproportionate swings in QTS, making the metric inherently more volatile at the top end of the market.
Knight Frank’s report reflects optimism in India’s housing market, especially in the premium segment, despite steady overall sales volumes. Price growth has been healthy in Q3 2025 despite overall sales not seeing any growth.
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