India's Real Estate Market 2026: Sustaining Growth and Trends

India’s real estate sector has remained robust through 2025, driven by strong economic growth, supportive government policies, and rising investor confidence. As India enters 2026, the sector has moved beyond recovery into a phase of structural maturity. Improved affordability, growing buyer confidence, and steady demand are creating long-term stability and growth.

The Residential Segment

India’s residential real estate market in 2026 is experiencing a thoughtful correction rather than a crisis. Housing sales in the top eight cities dropped by 14% from 303,000 units in 2024 to 261,000 units in 2025, primarily due to affordability issues. However, the impact of the decline in volume is less than the value growth, with sales expected to reach ₹6.65 lakh crore in FY26, a 19% rise fueled by branded developers and price appreciation.

High-end housing, plotted developments, gated villas, and projects focused on wellness continue to attract wealthy buyers. Fractional ownership is making it easier for more people to access these premium properties. Secondary and tertiary cities such as Ahmedabad, Surat, Coimbatore, and Jaipur are becoming new growth centers, thanks to their infrastructure improvements, premiumization, and increasing mid-segment house prices.

The Mumbai Metropolitan Region (MMR) continues to lead the residential property market with the highest share of 31% in total sales, followed by Pune with 17%, and NCR and Bengaluru, each with 15%. Chennai is the only city that has seen a 33% rise in sales compared to Q3 2024, thanks to good project completions and low prices. Kolkata improved by 4% year-on-year, maintaining its popularity in the affordable and mid-range housing segments. Conversely, MMR, Pune, NCR, and Hyderabad experienced a decline in demand, with high property prices being the main factor hindering buyer affordability.

The Office Segment

The Indian office real estate market in 2026 is expected to undergo a period of rebirth. The sector is transitioning from being a mere supplier of corporate space to a strategic investment category for world-class multinational corporations and Global Capability Centers (GCCs). GCCs, which experienced a boom in 2025, are projected to account for 40-50% of the demand for Grade A offices this year, amounting to 30-35 million square feet of leasing.

Metropolitan cities such as Bengaluru, Hyderabad, Pune, and NCR are anticipated to occupy 62-68 million sqft together in 2026, representing a 12% increase compared to the previous year. Bengaluru is the top city with 20-22 million sqft of new office space, followed by Hyderabad with 12-14 million. Rental rates for top-notch properties are forecasted to rise by 7.5-9% per year as the rates of expensive Grade A spaces continue to decline.

Flexible workspaces, including co-working and managed offices, have become the norm, expected to comprise 20% of leasing. This trend is driven by tenants' preference for shorter contracts and hybrid-fit solutions. Technology and sustainability are also transforming the office landscape, with AI-based planning, IoT, and green certification becoming more prevalent. Up to 90% of new supply will be considered under these criteria. The SEBI’s decision to treat REITs as equity instruments starting from January 2026 is a significant factor in attracting institutional capital investment, with major REITs predicting a 10-12% rise in dividends.

The Logistics and Industrial Segment

India is poised for a revolutionary change in the logistics and industrial segment in 2026, with a projected absorption of 55 million sqft, surpassing office space growth. The three structural drivers behind this rise are Production Linked Incentive (PLI) schemes, the booming e-commerce and quick commerce networks, and the “China+1” supply chain strategies.

Manufacturers such as Foxconn and Tesla’s vendors setting up operations in Chennai, Ahmedabad, and Guwahati have contributed significantly to the manufacturing-led demand. Large transactions surpassing 200,000 sqft are expected to make up 40-50% of the demand, reflecting intended corporate growth. E-commerce and hyperlocal quick-commerce are also strong, requiring an extensive micro-warehouse network to support 10-minute deliveries. Grade A logistics facilities with cold-chain and solar infrastructures are renting out at ₹45-55 per square foot in the best locations, showing 12-18% yearly growth.

Investment Landscape

REITs and fractional ownership have made it possible for more people to invest in real estate. The Indian REIT market is currently valued at ₹1.66 lakh crore, resulting in a 25-50% appreciation in unit prices and 40-50% profit growth. The 2026 reclassification by SEBI as equity instruments for institutional investors is widening the inflow of such investors, with the projected capital deployment standing at a whopping $7.2–7.8 billion, a 28% increase year over year.

Conclusion

India’s real estate market in 2026 is enjoying the benefits of a structural growth phase. This phase is characterized by disciplined execution and quality assets taking precedence over volume alone. Housing markets are becoming more uniform across the country, while the commercial, logistics, and other developments are growing rapidly due to better infrastructure, expansion of GCCs, and increased foreign institutional investment (FII).