Office Rents In Mumbai Rise 11% In Q3, But What’s The Real Story Behind Residential Sales?

Mumbai: Despite cautious developer sentiment, Mumbai recorded the highest number of residential home sales across India in the third quarter of 2025. According to real estate consultancy Knight Frank India, 24,706 homes were sold in Mumbai between July and September, marking a 2 percent increase over the same period last year. This highlights Mumbai’s continued dominance in the residential property market amid rising demand and limited new supply.

Office Rent Increases Despite Lower Transactions

The report also showed a contrasting trend in the commercial real estate sector. Mumbai saw an 11 percent rise in average office rent during the quarter. However, this came alongside a 27 percent year-on-year drop in transaction volumes. Experts suggest that while demand for high-quality office space remains, overall market activity may have slowed due to global economic factors or corporate cost-cutting measures.

Property Prices Driven by Premium Demand

Residential unit prices in Mumbai saw a 7 percent year-on-year rise, primarily driven by steady demand in the high-value segment (Rs 1 crore and above). This premiumisation trend reflects how a significant portion of buyers are now opting for luxury or upper-mid-segment homes, keeping prices stable despite broader market fluctuations.

How Other Cities Performed

After Mumbai, Bengaluru recorded 14,538 sales but saw a slight 2 percent dip. Delhi-NCR followed with 12,955 units sold, reflecting a 5 percent drop. Pune faced the biggest slowdown with an 8 percent decline in home sales. On the other hand, Hyderabad and Chennai showed positive growth at 5 percent and 12 percent respectively. Ahmedabad saw a marginal 3 percent increase.

Fewer New Projects Being Launched

Interestingly, Mumbai witnessed a 19 percent decline in new residential launches, totaling only 19,145 units. This trend suggests that developers are being cautious, choosing to conserve capital and prioritize completion of ongoing projects rather than starting new ones. This conservative approach is echoed across major cities, indicating a shift towards stability over expansion.

Expert View on the Market Shift

According to Gulam Zia, Senior Executive Director at Knight Frank India, the real estate market is currently being driven by premium buyers, while overall demand has remained steady. Despite rising prices, the market hasn’t overheated, indicating sustainable growth rather than speculative spikes.