India's housing pips global peers as prices rise faster than most countries

India ranks 10 th in price growth with 9.6% annual growth; only APAC market in top 10

At a time when housing markets across the world are struggling to regain momentum, India’s residential real estate has emerged as a rare outperformer. According to Knight Frank’s Global House Price Index (Q3 2025), India recorded a 9.6% year-on-year rise in home prices, placing it 10th globally and making it the only Asia-Pacific market in the global top 10 for price growth.

 

By comparison, the global average annual house price growth stood at just 2.4%, underscoring how sharply India has outperformed mature markets such as the US, UK, Germany and China, where price growth remains muted or negative.

 

How India compares globally

 

 

Emerging and select European markets dominated the upper end of the global rankings, led by Turkey with a nominal price growth of over 32%, followed by North Macedonia and Portugal. However, many of these markets are grappling with high inflation, which has eroded real returns. 

Turkey records price growth of over 32% YoY to top the charts

 

India stands out for delivering both strong nominal growth and positive real price gains, reflecting genuine housing demand rather than speculative excess 

 

Domestic demand remains the key driver

 

Residential sales across India’s top eight cities remained steady in 2025 at over 348,000 units, with H2 2025 volumes reaching their highest level since 2013. 

 

Market health indicators remained balanced, with the quarters-to-sell ratio holding at 5.8 quarters, despite a rise in unsold inventory driven largely by higher-value project launches.

 

Price growth has been broad-based across cities, led by:

 

• NCR: 19% year-on-year
• Hyderabad: 13%
• Bengaluru: 12%
• Mumbai: 7%

 

This reflects sustained demand for mid-to-premium and premium homes, supported by cumulative interest-rate cuts, steady income growth and buyer preference for larger, better-located homes.

 

A structural shift in buyer preferences

 

One of the most striking data points from the report is the continued shift towards higher-value housing. Homes priced above ₹1 crore now account for nearly 50% of total residential sales, signalling a structural change in buyer behaviour rather than a cyclical spike.

 

Developers, in turn, have responded by:

 

• Moderating fresh launches
• Prioritising project execution
• Offering targeted financing schemes instead of price discounts

 

This disciplined approach has helped sustain absorption while keeping price growth orderly.

 

"India’s housing market continues to stand apart in a global environment that remains uneven. The combination of strong economic growth, easing financial conditions and a decisive shift towards end-user-led demand has created a more mature and resilient residential cycle. As we move into 2026, we expect the market to be defined by stable absorption, selective price appreciation and disciplined supply, rather than speculative excess," said Shishir Baijal, International Partner, Chairman and Managing Director,Knight Frank India.

 

Global market performance

Across global housing markets, price growth strengthened modestly in Q3 2025 as easing monetary conditions began to feed through to demand. Emerging and select European markets dominated the upper end of the rankings, led by Turkey, where nominal prices rose sharply despite real growth remaining

constrained by elevated inflation. 

 

North Macedonia and Portugal also recorded strong annual gains, reflecting continued momentum in smaller, supply-constrained European markets. In contrast, several mature markets continued to lag, with price declines persisting in parts of Northern Europe and East Asia.

 

Global outlook

Looking ahead, the outlook for global housing markets is cautiously improving. The broad pivot by central banks towards rate cuts is easing borrowing costs and supporting buyer sentiment across an increasing number of markets. However, real price growth remains under pressure in many countries, as inflation continues to erode affordability. As a result, the next phase of recovery is likely to be gradual rather than uniform, with performance increasingly shaped by local economic resilience, policy support and supply dynamics rather than a broad-based global upswing.

 

“Nominal growth has edged higher again as central banks pivot towards cuts, but real gains are still hard-won. To see firmer growth into 2026, policymakers will need to maintain an easing while inflation continues to retreat,” said Liam Bailey, Knight Frank’s Global Head of Research.