India's Real Estate Market Thrives: Premium Housing and Commercial Leasing Surge in 2025
In 2025, India's real estate sector is witnessing a significant transformation, with a surge in premium housing sales and record commercial leasing activities, driven by robust policy reforms and market confidence.
Real EstateLuxury HomesCommercial LeasingPolicy ReformsFdiReal EstateSep 29, 2025
The first half of 2025 has witnessed a perceptible shift in consumer preferences in the housing market. Luxury homes, priced at ₹1 crore and above, have accounted for 62% of residential sales, compared to 51% in the same period last year. On the other hand, affordable housing has declined by 38% in the same period, indicating a rise in affluence among homebuyers and increased confidence among buyers in established realtors and developers.
Markets in Delhi-NCR, Bengaluru, and Chennai have led the way in premium project launches, with prices in these markets posting double-digit gains. This change is primarily driven by lifestyle upgrades and an increase in investors seeking high capital appreciation. Developers and realtors, too, are prioritising high-margin residential project launches. Cities like Bengaluru, Chennai, and Kolkata are witnessing record project growth.
India’s office market, on the other hand, is well-positioned to post a record-breaking year in 2025. Gross leasing volumes are expected to cross 90 million square feet this year, the report says, surpassing the previous year’s volumes. Leasing in the first half of the year totalled 42 million square feet, driven by robust demand from global capacity centres, IT-BPM firms, BFSI, and flexible co-working space operators.
Delhi-NCR, Bengaluru, and Mumbai recorded more than 60% of leasing activity. On the other hand, net absorption rose 19% year-over-year. A steep rental growth is also observed in Mumbai and Hyderabad, the report notes. This, in tandem with a lag in supply, reduced vacancy rates and spiked rents across major cities in India.
On the policy and regulatory front, sweeping reforms are transforming and enabling greater market transparency, instilling investor confidence. According to the report, the government is planning to digitise 100% of the land records, with 99.8% of the existing land records already digitised. This move by the government, the report claims, will unlock greater FDI, for it will curtail fraud, litigation, and ambiguous titles. This, in turn, the report says, will facilitate easier transactions and credit access, aligning India with global standards.
The Maharashtra Housing Policy 2025 proposes a law similar to RERA for redevelopment projects, aimed at protecting homeowners from delays, stalled projects, and associated risks. It includes a proposed ₹2,000 crore investment in self-redevelopment. Meanwhile, Uttar Pradesh has approved new MSME land policies to boost industrial growth through transparent e-auctions and regionally standardised plot rates, positioning the state as a hub for Global Capability Centres with substantial developer backing and large commercial developments.
The report also highlights the robust activity from private equity and capital markets, which was witnessed throughout the first half of the year. Major deals included key investments made by prominent firms such as Blackstone, HDFC Capital, and GIC across residential, mall, and IT park sectors. New capital market deals involved major IPOs such as Knowledge Realty Trust REIT, Sri Lotus Developers, and Smartworks Coworking Spaces, the report highlights.
India’s real estate outlook for the remainder of 2025, according to Equirus, remains bullish. It will be driven by regulatory reforms, in tandem with surging premium demand for residential property, record commercial leasing for office spaces, and strong influx of institutional capital.
Frequently Asked Questions
What is driving the surge in premium housing sales in India?
The surge in premium housing sales is driven by lifestyle upgrades and an increase in investors seeking high capital appreciation. Consumer preferences have shifted towards luxury homes priced at ₹1 crore and above.
Which cities are leading in premium project launches?
Delhi-NCR, Bengaluru, and Chennai are leading in premium project launches, with prices in these markets posting double-digit gains.
What is the expected gross leasing volume for the year 2025?
Gross leasing volumes are expected to cross 90 million square feet in 2025, surpassing the previous year’s volumes.
What policy reforms are transforming the real estate market?
The government is planning to digitise 100% of the land records, which will unlock greater FDI by curtailing fraud, litigation, and ambiguous titles. Additionally, the Maharashtra Housing Policy 2025 proposes a law similar to RERA for redevelopment projects.
What is the outlook for India’s real estate sector in 2025?
The outlook for India’s real estate sector in 2025 remains bullish, driven by regulatory reforms, surging premium demand for residential property, record commercial leasing for office spaces, and strong influx of institutional capital.
Related News Articles
Retail Revolution: India's Retail Space Expected to Boom by 50%
The top seven cities in India, including Mumbai, Delhi NCR, Bengaluru, Hyderabad, Pune, Kolkata, and Chennai, are projected to witness a surge in retail space, with Delhi NCR leading the charge.
Insolvency Proceedings Initiated Against Jaiprakash Associates by NCLT
The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Jaiprakash Associates, a leading real estate developer, following a plea by ICICI Bank.
Whiteland Corp Partners with Marriott International for Luxurious Housing Project in Gurgaon
Real estate developer Whiteland Corporation has signed an agreement with Marriott International to bring Westin Residences to Gurgaon, offering a luxurious housing project with hotel-inspired lifestyle
New LTCG Rules Bring Relief to Homeowners, Boost Real Estate Stocks
The Finance Minister's decision to amend the LTCG rules has brought cheer to homeowners and boosted real estate stocks. Here's what it means for you.
Shaping Urban India: The Evolution of Real Estate Since Independence
India's real estate sector has played a pivotal role in shaping urban development since independence. With the urban population growing from 62 million in 1947 to over 485 million today, the sector has undergone significant transformations.
Mumbai Police Arrests Conman Who Duped Real Estate Developer of ₹4 Crore and 3.5Kg Gold
Worli police apprehended Dhirendra Chandrakant Shukla, a wanted real estate agent, for duping Avighna Group of Rs2 crore and 3.5kg gold by promising a vacant plot in Worli for development.