India’s housing market continued to display surprising strength in the third quarter of 2025, defying a backdrop of global economic strains and geopolitical unease. According to new data, the residential sales value surged 14 percent year-on-year, climbing from approximately Rs 1.33 lakh crore in Q3 2024 to Rs 1.52 lakh crore in Q3 2025. The increase underscores the enduring appeal of real estate as both an asset class and a lifestyle aspiration, sustained by rising urban incomes and persistent demand for homeownership. Yet, this upward momentum was shadowed by a decline in sales volumes, raising questions over affordability and structural imbalances across India’s property markets.

Resilient Growth Despite Headwinds

The Indian real estate market’s latest performance is significant as it comes at a time when most global economies are grappling with interest rate volatility, slowing consumption patterns, and capital allocation struggles. Domestically, a confluence of income growth, rapid urbanisation, and aspirational ownership trends propped up transaction values, even when the number of actual housing units sold dropped.

In Q3 2025, around 97,080 units were sold across the top seven Indian cities, compared with 1.07 lakh units in Q3 2024, marking a 9 percent annual decline in sales volumes. This divergence, where value surges even as volume slips, points to an evolving buyer profile where mid-to-premium segment demand is outpacing mass-market affordability. Higher-priced homes are increasingly driving aggregate values, suggesting a market skew toward wealthier segments.

City-Wise Breakdown of Sales

The sales distribution provides an important window into the dynamics of regional real estate activity. The Mumbai Metropolitan Region (MMR) retained its position as the largest housing market, clocking approximately 30,260 units sold in Q3 2025. Its dominance is not surprising, given Mumbai’s dual identity as both a financial hub and a magnet for aspirational buyers.

Pune followed with 16,620 units sold, reinforcing the western region’s outsized role in India’s residential demand. Together, MMR and Pune alone contributed 48 percent of total sales across the top seven cities, underlining the concentration of demand in western corridors.

Notably, every major city reported yearly declines in housing sales except for two outliers—Chennai and Kolkata. Chennai witnessed a remarkable 33 percent year-on-year increase in sales, while Kolkata registered a more modest 4 percent annual gain. This variance highlights the uneven nature of demand across India, often driven by local dynamics ranging from pricing strategies to infrastructural momentum.

Affordability and Supply Considerations

The market’s dual narrative—value growth alongside declining unit sales—signals persistent affordability challenges. With urban housing prices escalating faster than income growth at entry levels, first-time buyers appear increasingly sidelined. Developers, in turn, have been focusing launches more toward higher-ticket projects, aligning supply with consumers who possess greater purchasing power.

This skew creates vulnerabilities. If macroeconomic uncertainties deepen or credit conditions tighten, the very premium buyers sustaining value growth could turn cautious. Moreover, the 9 percent dip in housing volumes points to unmet demand potential in the affordable and mid-income categories, a segment critical for long-term real estate stability.

Strategic Insights for Real Estate Investors and Developers

For investors, India’s Q3 housing market performance reinforces the resilience of urban property as a stable store of value, even in the face of global turbulence. However, the skew toward premium properties and falling volumes calls for nuanced strategies.

Developers may need to revisit supply allocations toward affordable homes to tap a mass segment that remains under-served.

Investors should evaluate regional divergence carefully, with Chennai and Kolkata offering counter-cyclical opportunities amid weaker showings elsewhere.

Policy makers could address affordability constraints to ensure balance between aspirational demand at the top and broader market inclusivity.

India’s housing story remains one of resilience, ambition, and evolving buyer patterns. The robust sales value growth illustrates how deep-rooted the aspirations of homeownership run in Indian society, while volume declines remind stakeholders of structural stresses that need attention for sustained expansion.