India's Real Estate Sector: A Beacon of Optimism Amid Global Challenges
India's real estate sector shows a buoyant outlook in Q3 2025, with the NAREDCO Real Estate Sentiment Index climbing to 59, driven by strong market fundamentals and consistent demand.
Real EstateNaredcoSentiment IndexEconomic ConditionsMarket FundamentalsReal EstateNov 15, 2025
The Current Sentiment Score has climbed to 59, up from 56 in the previous quarter, while the Future Sentiment Score remains robust at 61, firmly in the optimistic zone. This positive sentiment is underpinned by strong market fundamentals, including vigorous office leasing activity and sustained residential demand, particularly in the high-ticket segments. The sector's confidence is further bolstered by stable macroeconomic conditions, with easing inflation and consistent policy measures enhancing liquidity and investor trust.
Shishir Baijal, chairman and managing director of Knight Frank India, remarked, 'The sustained optimism in the Q3 Sentiment Index highlights the sector's resilience. Both current and future sentiment scores are comfortably positive, reflecting confidence in India's economic stability and growth prospects. The premium residential segment remains strong, and the office market continues to show depth with robust leasing pipelines.'
Regionally, the south zone leads with a sentiment score of 62, driven by strong leasing in Bengaluru and Hyderabad. The north zone is recovering, with a score of 56, supported by steady office activity in NCR. The east and west zones also show stable optimism, reflecting balanced growth across the country. Developers are cautiously optimistic, with a sentiment score of 59, while non-developers, including banks and financial institutions, maintain a steady optimism at 61. This alignment indicates a market confidence rooted in liquidity and asset quality.
The residential market outlook is promising, with 71% of respondents expecting stable or increased new launches, and 74% anticipating stable or improved sales. This optimism is fueled by rate cuts and buyer-focused incentives, enhancing affordability. Key markets like NCR, Bengaluru, and Hyderabad are driving price momentum, with significant year-on-year increases. The office segment remains the most optimistic, supported by steady occupier demand and disciplined new supply. About 95% of respondents expect office rents to remain stable or rise, driven by limited Grade A availability and strong leasing momentum.
Economic indicators are favorable, with 78% of respondents expecting stable or improved economic momentum, supported by easing inflation and robust fiscal spending. Funding conditions are also expected to remain stable or improve, aided by the RBI's accommodative stance. Parveen Jain, president of NAREDCO, added, 'The Knight Frank NAREDCO Real Estate Sentiment Index reflects steady confidence in India's property market. Developers and investors are optimistic, supported by stable demand, policy continuity, and healthy funding conditions.'
As India’s real estate sector enters Q4 2025, it does so with balanced confidence and sustained growth potential, driven by structural fundamentals, consistent demand, and supportive economic conditions. Despite global headwinds, the sector remains on a promising growth trajectory.
Frequently Asked Questions
What is the NAREDCO Real Estate Sentiment Index?
The NAREDCO Real Estate Sentiment Index is a measure of confidence and optimism in India's real estate sector, reflecting the current and future outlook of developers, investors, and other stakeholders.
What is the current sentiment score for Q3 2025?
The current sentiment score for Q3 2025 is 59, up from 56 in the previous quarter, indicating a positive outlook for the real estate sector.
Which regions in India show the highest sentiment scores?
The south zone leads with a sentiment score of 62, driven by strong leasing in Bengaluru and Hyderabad, followed by the north zone with a score of 56, supported by steady office activity in NCR.
What factors are driving the optimism in the residential market?
The residential market optimism is driven by rate cuts, buyer-focused incentives, and enhanced affordability, with key markets like NCR, Bengaluru, and Hyderabad showing significant year-on-year increases in prices.
How do economic indicators support the real estate sector's growth?
Economic indicators are favorable, with 78% of respondents expecting stable or improved economic momentum, supported by easing inflation and robust fiscal spending, which further boosts the sector's growth potential.
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