India's Real Estate Market: Trends and Outlook for 2026

Key real estate asset classes—housing, office, and logistics—are expected to remain on a healthy growth trajectory in 2026, with non-residential segments likely to outperform. While the residential sector, which peaked in the post-covid-19 period, saw a slowdown in 2025, commercial office and logistics assets offer greater scope for further growth. Let’s delve deeper into the trends and outlook for each segment.

What were the defining trends of 2025?

India’s housing sector recorded its second consecutive year of declining sales in 2025, as high prices eroded affordability. Despite a fall in sales volume, rising prices led to growth in transaction value, as developers moved towards premium housing. This trend was driven by a shift in consumer preference towards higher-end properties, which are perceived as better investments.

In contrast, commercial real estate surged, with strong leasing momentum for good office space. Flexible workspaces gained more favor among occupiers and investors, as leading operators such as WeWork India Management Ltd, Indiqube Spaces Ltd, and Smartworks Coworking Spaces Ltd went public. These companies are expected to continue their expansion in 2026, driven by the increasing demand for flexible and agile work environments.

Global capability centres (GCCs) emerged as a key office occupier class in the top-tier cities. Industrial real estate and warehousing have been on a roll in terms of demand and leasing, as well as land acquisition and investments. Despite global trade uncertainties, logistics were largely driven by manufacturing demand in the country.

Will home sales slow down further?

The dent in home sales in the last two years was preceded by a sharp rise, as the residential sector recovered from the pandemic. Those euphoric days of a boom cycle are over. Even so, sales are expected to remain stable and moderate in 2026, with credible, branded developers outperforming their peers. Property analysts believe the market is healthy with unsold inventory levels still under control and good demand for housing.

Housing sales will also depend on property prices and new project launches. In 2025, the average residential price growth rate tapered down to a single digit. The sector’s performance in 2026 hinges on factors such as the Reserve Bank of India's (RBI's) rate cuts and developers' price control. Further repo rate cuts leading to lower home loan interest rates can cause demand to revive significantly, according to Anarock Property Consultants.

How will top developers fare?

The growing dominance of branded developers in India’s housing market is driven by a robust pipeline of project launches and a focus on premium projects that yield higher margins. While the overall real estate market is showing some signs of plateauing, the top developers continue to sell well. The top four developers—Godrej Properties Ltd, DLF Ltd, Prestige Estates Projects Ltd, and Lodha Developers Ltd—are collectively aiming to cross ₹1 trillion in residential sales in 2025-26, marking the strongest year yet for branded players. The bigger challenge for these developers is not sales, but rather constructing and delivering the projects they have sold.

Will the office sector defy odds?

The office market extended its post-pandemic upswing through 2025, with gross leasing expected to surpass 80 million square feet, almost at par with 79 million sq. ft in 2024, according to CBRE India estimates. GCCs accounted for roughly 35-40% of the total office demand. India’s office market is a global outlier, with sustained growth, even as markets worldwide struggle with subdued demand and weak leasing activity.

The year 2026 is expected to witness sustained leasing momentum, marked by expansion among occupiers, workplace reconfiguration, and a continued shift towards premium, future-ready assets. Vacancies in top-grade office spaces are expected to decline, and rentals will appreciate selectively in high-performing micro-markets. Managed and flex workspace operators who raised money through initial public offerings (IPOs) will also be in expansion mode.

What will drive the logistics sector?

After 2025, manufacturing demand is expected to take the lead on the leasing scoreboard in 2026 as well. While third-party logistics (3PL) is another growth driver, e-commerce is expected to regain momentum. Around 51 million sq. ft of gross absorption happened in 2024, and 2025 is expected to have closed at 55-57 million sq. ft. With leasing on a roll, a further 15-18% growth in leasing may happen in 2026, according to JLL India estimates.

Global and domestic investor activity in the sector will also pick up pace, with a couple of large warehousing portfolio sale deals currently on. Blackstone’s Horizon Industrial Parks is also likely to launch an IPO this year to raise around $300 million.