India’s Residential Market Enters A New Growth Cycle

The Indian real estate market closed 2025 on a strong footing. This was seen especially in the residential sector. This year marked a transition from volume-led expansion to value-driven growth. As per CBRE’s India Market Monitor Q4 2025 Report, the residential sector experienced a rare scenario. Both housing sales and new launches crossed 2,70,000 units during this year, that too, during global uncertainty. The composition of the demand has undergone a shift, with premium, luxury, and high-end housing being the drivers of this growth.

Growth Rates

The headline numbers from the report underline how the sector has maintained momentum. Luxury sales have recorded a 62 per cent year-on-year (YoY) growth in Q4 2025. While for the year 2025, luxury sales have crossed over 70 per cent YoY. This makes it the fastest-growing sector this year. This surge has pushed high-end housing towards being a dominant category in sales contribution. This becomes an inflection point in the housing market.

The numbers demonstrated a steady and disciplined supply addition. In Q4 2025, sales touched 62,500 units, which also outpaced the launches witnessed in the same quarter. This revealed a pattern that helped in preventing inventory leftovers and reinforced market stability.

The growth was dominated by the luxury sector; affordable and budget housing had witnessed a muted growth rate. This signals how homebuyers are moving towards aspirational buying and a growing preference for statement homes.

What Is Driving This Growth?

The report signals multiple factors that are behind this performance. Firstly, developers are now not just mass-producing and broadening their inventory, they are planning it as per buyer trends, preferences, and practicality. As noted in the report, supply is “strictly aligned with delivery realities.”

Secondly, the demand is backed by wealth creation, urban job growth, and lifestyle upgrades that buyers are experiencing. Their personal growth promotes them towards a more aspirational and affluent lifestyle. Their want for better amenities, premium names, and larger homes is supported by developers focusing on premium and limited-unit projects.

Cities Leading the Growth Story

The growth narrative in 2025 was led entirely by the Metros. Mumbai, Pune, and Delhi NCR have accounted for a total of 61 per cent of residential launches in the year and a total of 59 per cent of total sales in Q4 2025.

Mumbai remained the single largest market in residential real estate. This market was driven by sustained demand for premium, luxury, and redevelopment-led strategic supply. Around 70,650 units were launched in the city in 2025, with sales crossing 57,300 units.

Mumbai was followed by Pune, with approximately 53,200 units sold and 44,400 units launched in 2025. This exchange was supported by a strong IT and manufacturing base hosted in the city. This attracted both buyers and investors.

Delhi-NCR continues to benefit from a consistent demand for a premium residence in the capital. With around 40,100 units sold in 2025, the region has redeemed itself as a high-value and premium destination for residential aspects.

2026 Outlook

As per the report, CBRE expects these strong results to be persistent into 2026. The report states, “expected to continue in the coming quarters, marking a transition towards a value-led growth trajectory,” showing how the market is promising with the right focus and approach. Developers are likely to remain cautious in launching new inventory while focusing on including supply infused with realistic market demands.