Mumbai, the financial hub of India, has witnessed a 1% decline in housing sales in 2025, totaling 97,188 units sold, despite a 7% increase in average prices, which now stand at Rs 8,856 per sq ft. This paradox of rising prices combined with falling sales reflects a complex marketplace where demand appears to be stagnating. The latest report from Knight Frank India indicates that overall housing sales across eight major cities decreased to 3,48,207 units, showcasing a broader trend that has raised eyebrows among industry stakeholders.
The stagnation in demand comes even as factors such as declining interest rates on home loans, robust economic growth, and lower inflation have been favorable for potential buyers. During a virtual press conference, Shishir Baijal, CMD of Knight Frank India, emphasized that the sales momentum persisted throughout the year. Despite the average price rise of up to 19%, the real estate sector has faced challenges in maintaining sales velocity, particularly in key markets such as Delhi-NCR, where sales plummeted by 9% to 52,452 units, even as prices soared by 19% to Rs 6,028 per sq ft.
In Bengaluru, the market remained relatively stable, with sales at 55,373 units, but average prices surged by 12% to reach Rs 7,388 per sq ft. Meanwhile, Pune experienced a 3% dip in sales, landing at 50,881 units, while prices saw a modest appreciation of 5%. The dynamics in Hyderabad were more optimistic, where sales increased by 4% to 38,403 units, accompanied by a 13% rise in prices to Rs 6,721 per sq ft. This regional disparity highlights the varying responses of different markets to economic stimuli and consumer sentiment.
Looking ahead to 2026, Baijal expressed a cautiously optimistic outlook for the residential market, suggesting that continued reductions in interest rates could enhance affordability and stimulate sales. Notably, the contribution of Non-Resident Indians (NRIs) to housing sales has increased significantly, now accounting for 12-15% of transactions, compared to single digits a decade ago. This trend underscores the growing appeal of Indian real estate in the global market, despite local volatility.
In conclusion, while the 2025 housing data reflects a complicated landscape marked by rising prices and stagnant sales, the ongoing economic factors and NRI interest may provide a foundation for recovery in the coming year. Stakeholders in the real estate sector will need to navigate these challenges carefully to harness opportunities for growth in an evolving market.