India’s housing market showed its first signs of cooling in two years as the Knight Frank NAREDCO Sentiment Index for Q3 2025 reported that current sentiment had risen to 59 from 56 while future sentiment had held at 61 from 61. The survey noted that builders had concentrated new launches in premium projects and had slowed mid income supply, confirming that the market had shifted into a steadier phase. This change had given ordinary homebuyers more negotiating power after an extended period of sharp price increases.
The report also stated that 92% of stakeholders had expected prices to stay stable or rise. This figure had been lower than the 96% recorded a year earlier. The moderation showed that the price surge of 2023 and 2024 had started to ease as buyers resisted higher valuations in non premium categories.
Office stability supported homebuyer sentiment in key metros
Commercial markets had remained resilient. About 95% of respondents had expected office rents to stay stable or rise and 78% had expected new office supply to remain steady or slightly increase. Strong leasing in Bengaluru, Hyderabad and Pune had helped maintain confidence for urban homebuyers who base purchase decisions on employment visibility and income stability.
Regional readings had aligned with this trend. The South had recorded a sentiment score of 62 while the North had improved to 56. These zones tend to influence mid market homebuying because construction progress and job movement are directly felt in these areas.
Funding conditions had remained steady and helped buyers plan
The report noted that 86% of respondents had expected funding and liquidity conditions to stay stable or improve. Predictable borrowing costs had allowed end users to plan mortgages without sudden rate shocks. Developers had also signalled caution. Their future sentiment reading had moved to 59 from 63 while non developer stakeholders had stayed at 61. As a result, developers will focus on projects with strong presales and will avoid speculative expansion.
Bhupindra Singh, COO, RISE Infraventures said, “We are seeing the market entering a healthier, more balanced cycle after an intense two-year bull run that pushed prices sharply upward. For the first time in several quarters, end-users are regaining negotiation power as launches moderate and developers streamline portfolios toward focused, premium offerings. Besides, there is a shift from emotionally driven buying to rational, need-based decisions; families taking time to evaluate location, connectivity, and the real cost of ownership. With monetary conditions stable and inflation softening, serious homebuyers finally have a sensible opportunity to enter the market without the pressure of steep quarterly jumps.”
Why this period is favourable for homebuyers
Stable rates, easing inflation, moderated mid income launches and softer price expectations together create a practical buying environment. This is not a distressed cycle. It is a measured phase where buyers can evaluate options and negotiate with more confidence. Prices will not climb at the earlier pace and developers will need to work harder to close mid range sales.
Premium housing will continue to expand because higher income demand and NRI interest will remain strong. However, this trend will not automatically spill into mid income pricing because the two segments operate under different drivers.
“After two years of aggressive price appreciation, we’re finally seeing Delhi-NCR’s luxury market mature into a more measured, value-conscious phase. The frenzy has settled, and buyers are far more discerning, comparing neighbourhoods, amenities, and long-term liveability instead of rushing into decisions. In Gurugram, developers, too, are recalibrating launches to ensure quality, timely delivery, and curated luxury rather than volume for the sake of it. It’s being fueled by genuine high-net-worth end-users who value prime quality, connectivity, and long-term capital growth. With interest rates stable and inflation cooling, this is perhaps the most favourable window in recent quarters for end-users to upgrade thoughtfully. It’s a moment where patience, planning, and real value are rewarded,” said Kapil Bhagat, General Manager, Better Choice Realtors
The takeaway for end users
Q3 2025 is the first phase in two years where end users hold real leverage. Developers will continue prioritising premium launches, but mid income supply will stay selective. Buyers will have the time to shortlist projects, negotiate terms and choose builders with stronger delivery records. The report shows a shift from urgency to balance, and that shift gives mid income households a more stable path to purchase.
