India's Real Estate Investment Plummets 33% Amid Global Uncertainties
Institutional investment in Indian real estate has dropped by 33% in the first quarter of 2025, with foreign fund inflows halving. However, domestic investments have shown a significant increase.
Real EstateInvestmentIndiaDomestic InvestorsForeign InvestorsReal Estate NewsJul 03, 2025
Domestic investors, on the other hand, remained optimistic and increased their investments by 32%, pumping in USD 642.8 million during April-June, up from USD 486.5 million in the corresponding period of the previous year. This shift towards domestic capital has been a significant trend in India's real estate market, with domestic investments accounting for a growing share of the total investment pie.
"Domestic capital has emerged as a key driver in India's real estate investments, with its share in total investments rising steadily from 16% in 2021 to 34% in 2024," said Badal Yagnik, CEO of Colliers India. In the first half of 2025, domestic investments accounted for 48% of the total inflows, helping to cushion the impact of global uncertainties and push total investments to the USD 3 billion mark.
For the January-June period, institutional investment in real estate dropped 15% to USD 2.998 billion, from USD 3.528 billion in the year-ago period. Foreign institutional investment in real estate fell to USD 1.570 billion during the first half of 2025, down from USD 2.593 billion in the corresponding period of the preceding year. This decline was attributed to global investors remaining cautious due to evolving macroeconomic scenarios, credit flow, and inflationary pressures.
However, domestic investors continued to show confidence, injecting USD 1.427 billion, a 53% increase from USD 934.7 million in the first six months of 2024. The institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs, listed REITs, and sovereign wealth funds.
This trend highlights the resilience of the Indian real estate market, driven by a strong domestic investor base, even as global uncertainties persist. The growing dominance of domestic capital has helped maintain a steady investment flow, supporting the overall health of the sector.
Frequently Asked Questions
What caused the 33% drop in institutional investment in Indian real estate?
The drop was primarily due to lower foreign fund inflows amid global political and economic uncertainties.
How did domestic investments perform compared to foreign investments?
Domestic investments increased by 32% to USD 642.8 million, while foreign investments almost halved to USD 1.048 billion.
What percentage of total investments did domestic capital account for in the first half of 2025?
Domestic investments accounted for 48% of the total inflows in the first half of 2025.
What factors contributed to the cautious approach of foreign investors?
Global investors remained cautious due to evolving macroeconomic scenarios, credit flow, and inflationary pressures.
What types of investments are included in the institutional flow of funds?
The institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs, listed REITs, and sovereign wealth funds.
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