India Real Estate Report FY 2025-26: Trends, Insights, and Forecasts
While affordable housing saw a slight dip in Q1 2025, overall inventory is reducing, indicating long-term demand stability in India's real estate sector. The report highlights strong investor interest, emerging asset classes, and growing adoption of technology and sustainability practices.
Real EstateHousingCommercial Real EstateIndiaSustainabilityReal Estate NewsJun 19, 2025
Key Highlights:
– Residential Resurgence: Home sales across India's top cities have risen by approximately 77% since FY 2019, with a growing preference for mid-to-premium homes. Although affordable housing saw a slight dip in Q1 2025, overall inventory is reducing, indicating long-term demand stability.
– Commercial Real Estate on the Rise: Office leasing hit record levels in FY 2025, driven by demand from global capability centers, IT/ITeS, and flexible workspaces. Tier-2 cities are emerging as new hubs, attracting significant investment and development.
– Industrial & Warehousing Growth: The logistics and warehousing sector continues to expand, supported by the 'Make in India' initiative, GST reforms, and the National Logistics Policy. This growth is expected to drive further investment and development in the coming years.
– Capital Flows & Deals: India recorded 99 real estate transactions worth USD 6.99 billion in FY 2024–25. Private equity led with USD 3.15 billion, while public markets raised nearly USD 3 billion through IPOs and QIPs. This robust capital flow underscores the sector's attractiveness to investors.
– Technology & ESG Disruption: AI, blockchain, smart buildings, and green construction are reshaping how assets are developed and operated. Real estate tokenization and SM-REITs are emerging as new investment vehicles, offering innovative ways to invest in the sector.
The real estate sector faces challenges such as rising construction costs, regulatory delays, and the need to adapt to evolving consumer preferences, including wellness-centric and integrated living. However, the report forecasts sustained growth in premium housing, commercial office spaces, logistics infrastructure, and alternative investments, driven by digital innovation, urban decentralization, and investor appetite.
Developer Spotlight: Sobha Ltd.’s Bengaluru flagship, Sobha Dream Acres, is leading innovation in sustainable construction and efficient housing delivery, with plans to expand into Mumbai’s luxury market. “India’s real estate story is being rewritten—digitally, sustainably, and inclusively. The future is decentralized, tech-enabled, and investor-friendly,” said Shabala Shinde, Partner and Real Estate Industry leader at Grant Thornton Bharat.
The report emphasizes the importance of technology and sustainability in shaping the future of the real estate sector. As the industry continues to evolve, stakeholders must adapt to new trends and challenges to capitalize on the opportunities presented by a dynamic market.
Frequently Asked Questions
What is the current trend in home sales in India?
Home sales across India's top cities have risen by approximately 77% since FY 2019, with a growing preference for mid-to-premium homes.
How is the commercial real estate sector performing in India?
Office leasing hit record levels in FY 2025, driven by demand from global capability centers, IT/ITeS, and flexible workspaces. Tier-2 cities are emerging as new hubs.
What factors are driving the growth in the logistics and warehousing sector?
The logistics and warehousing sector is growing due to the 'Make in India' initiative, GST reforms, and the National Logistics Policy.
What are the emerging investment vehicles in the real estate sector?
Real estate tokenization and SM-REITs are emerging as new investment vehicles, offering innovative ways to invest in the sector.
What challenges does the real estate sector face in India?
The sector faces challenges such as rising construction costs, regulatory delays, and the need to adapt to evolving consumer preferences, including wellness-centric and integrated living.
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