Indian Property Investors: Key Trends Shaping the Real Estate Market in 2026

The Indian real estate market in 2025 has transitioned from a volume-driven recovery to a value-driven phase of “premiumization.” Buyer sentiment is extremely positive, with the Real Estate Sentiment Index reaching a two-year high of 68 in Q3 2025. An “Upsizing Rush” has been the major trend of 2025. People in India are not just buying houses; they are investing in a better lifestyle. The market share of affordable housing (less than ₹45 Lakh) is shrinking, while the luxury segment (greater than ₹1.5 Cr) and larger configurations (3BHK+) are experiencing explosive growth.

In India, 63% of people consider real estate the best asset class for investment, surpassing stocks and gold. The mantra is “Quality Over Price,” with buyers willing to stretch their budgets for better amenities. The “lowest price” is no longer the primary driver; “community living” and “upgrade potential” are. There is a clear preference for semi-furnished apartments, as buyers want quicker move-ins without the hassle of full interior work, but with the flexibility to add their own loose furniture.

A Magic Bricks report indicates that a surprising 67% of buyers now opt for peripheral locations instead of city centers (16%) or city limits (17%). Buyers are trading less commute time for bigger spaces, higher quality amenities, and lower prices in the suburbs. Gym, parking, garden/play area, jogging tracks, and swimming pools are the most preferred amenities among potential homebuyers in India.

Age Groups

The “Live Work Shop” survey conducted by CBRE revealed that approximately 44% of participants were interested in relocating to their new house in the next two years.

- Millennials (Age 29-44) : The 2025 market kings, representing 43% to 70% of total homebuyers. They have shifted their focus from “starter homes” to “forever homes,” viewing property as their main source of wealth. - Gen Z (Age <28) : The market isn’t entirely friendly to them yet, but they are coming in soon with specific requirements. They prefer co-living potentials, tech-integration (smart homes), and practical living arrangements. - Gen X (Age 45+) : The majority of activity is seen in the second-home and high-end segments. Profits from the sale of smaller homes are often reinvested into larger, retirement-friendly gated communities in Tier 2 cities or the outskirts of major cities.

Property Type

Both 2 and 4 BHK configurations are preferred by 40% of the group.

| Segment | Status | Key Insight | |------------------|--------|---------------------------------------------------------------| | Luxury (>₹4 Cr) | Boom | Sales up 28% YoY in Q1, 2025. Driven by HNIs and NRIs. | | Premium (₹90L – ₹1.5 Cr) | Growing | New “middle class” standard. 36% of buyers favor this bracket. | | Affordable (<₹45 L) | Shrinking | Demand share dropped to 17% from 36% in 2020. Low margins for builders and rising land costs. | | Plots/Land | Steady | High demand in Tier 2 cities like Nagpur and Mysore. |

Size & Configuration Preferences

The “Compact” sweet spot is the range between 500-1,000 sq. ft. (HSI 148), followed by 1,000-1,500 sq. ft. (HSI 145). The market favors mid-segment buyers who prioritize cost-effectiveness and utility over luxury spaces.

- 2 BHK : The clear favorite with an HSI of 150, driven by affordability concerns. - 4 BHK : Surprisingly, larger 4 BHK units hold the second-highest sentiment (HSI 147), likely driven by the upgrade market and multi-generational living needs. - 3 BHK : Scores lower (HSI 139), suggesting buyers either stick to budget 2 BHKs or leap to premium 4 BHKs.

Geographic Hotspots

Chennai leads with the highest customer mood (HSI 163), followed by Noida or Greater Noida, which has gained the second place due to new infrastructure (airport, metro) and increased demand for larger houses in the outskirts. Kolkata is now third. Tier 2 cities such as Coimbatore and Lucknow are slowly gaining recognition as ideal investment destinations due to improved infrastructure and lower costs of entry.

Conclusion

If you are looking to align with the “smart money” in 2025, the data suggests focusing on 2 BHK builder floors or plots in the peripheral areas of major employment hubs like Chennai or Noida. The sentiment strongly favors “semi-customizable” assets (plots/floors) over standard high-rise apartments.