Delhi-NCR Leads Home Price Growth in 2025 as Mumbai Retains Position as India’s Largest Housing Market: Knight Frank

Mumbai/Delhi:
Delhi-National Capital Region (NCR) emerged as the fastest-growing residential price market in 2025, recording a sharp rise in average home prices even as sales volumes moderated, according to a report released by Knight Frank India on Friday. At the same time, Mumbai continued to demonstrate resilience, retaining its status as the country’s largest housing market and delivering one of its strongest office leasing performances in over a decade.

The report highlights a phase of consolidation across key real estate markets, with pricing strength supported by premiumisation, infrastructure-led demand, and a steady pipeline of high-quality commercial supply.

Residential Market: Prices Rise Despite Softer Sales in Delhi-NCR

On the residential front, Delhi-NCR entered what the report described as a phase of “measured normalisation.” Annual housing sales in the region declined 9 per cent year-on-year to 52,452 units in 2025. Despite the moderation in transaction volumes, average home prices surged 19 per cent year-on-year to ₹6,028 per sq ft.

Knight Frank attributed the sharp price appreciation primarily to premiumisation trends in Gurugram, where demand remained skewed towards higher-value residential developments. The continued appetite for premium housing helped sustain price growth even as overall sales activity cooled compared to the previous year.
 

Delhi-NCR Posts Second-Highest Office Leasing Year

Beyond the residential segment, Delhi-NCR also delivered a strong performance in the office market. The region recorded its second-highest annual gross office leasing at 11.3 million sq ft in 2025. Although leasing volumes eased 11 per cent year-on-year from the previous year’s peak, NCR still accounted for 13 per cent of India’s total office leasing activity.

Leasing momentum slowed in the second half of the year, with H2 2025 transactions standing at 4.1 million sq ft, down 42 per cent year-on-year. The decline was attributed to a high base in the previous year and limited availability of Grade A office spaces.

At the same time, new supply rose sharply. Office completions in NCR reached 9.6 million sq ft in 2025, the highest level since 2019, indicating a strong pipeline of fresh commercial developments entering the market.

Gurugram Dominates, Noida Gains Ground

Within NCR, Gurugram continued to lead activity, accounting for 61 per cent of annual office transactions. The report noted that Noida gained momentum during the year, supported by improving infrastructure and the expected commencement of operations at Jewar airport, which has strengthened the region’s long-term commercial outlook.

In terms of occupier profile, demand in Delhi-NCR remained largely driven by India-facing businesses, which accounted for 35 per cent of annual office transactions. Global Capability Centres (GCCs) followed closely, contributing 26 per cent of total demand during the year.

Mumbai Remains the Largest Housing Market

While Delhi-NCR led residential price growth, Mumbai continued to hold its position as India’s largest housing market, reflecting sustained demand and market depth. Knight Frank noted that the city showed resilience across both residential and commercial segments during 2025.

In the office market, Mumbai recorded its second-strongest year for leasing in over a decade, with 9.8 million sq ft transacted during the year. Although this marked a 5 per cent year-on-year decline, overall activity remained robust.

Leasing volumes in the second half of 2025 stood at 4.3 million sq ft, supported by large-format transactions in scalable suburban locations. These areas continued to attract occupiers seeking flexibility and cost efficiencies.

GCCs Increase Presence in Mumbai Offices

The report highlighted a notable rise in the participation of Global Capability Centres in Mumbai’s office market. GCCs accounted for 27 per cent of leasing activity in the second half of 2025, reflecting a 9 per cent year-on-year increase. India-facing occupiers remained dominant, contributing 40 per cent of overall office demand in the city.

Grade A office assets continued to dominate demand across both Delhi-NCR and Mumbai. In Delhi, such assets accounted for 84 per cent of total transactions, underscoring occupiers’ preference for high-quality, well-connected commercial spaces.

Market Outlook Remains Supportive

Commenting on the findings, Mudassir Zaidi, Executive Director – North, Knight Frank India, said that strong fundamentals continued to support long-term growth in the office market. He pointed to a robust pipeline of quality supply and improving infrastructure connectivity as key factors underpinning sustained demand.

What Lies Ahead

The report suggests that while sales volumes may continue to stabilise after a strong run, pricing in premium residential markets is likely to remain firm, supported by buyer preference for quality assets. In the commercial segment, steady supply additions and evolving occupier requirements are expected to shape leasing activity across major cities.

With Delhi-NCR and Mumbai both showing distinct strengths, India’s top real estate markets appear positioned for balanced growth rather than rapid expansion, driven by fundamentals rather than speculative demand.