India's Real Estate Sector Continues to Thrive in 2025, Outlook Positive for 2026
India's real estate sector has shown remarkable resilience throughout 2025, supported by strong economic growth, steady consumption, and firm investor confidence, according to a recent report by Colliers. Despite global trade issues that slowed supply chains, factors such as easing inflation, better credit flow, and lower lending rates have kept buyers active across various real estate categories.
The report highlights that the office, housing, and industrial segments have recorded sustained demand throughout the year. Companies from the technology, banking, financial services, engineering, and flex space sectors have continued to take up office space across major cities. This steady activity has helped maintain confidence in commercial markets.
Housing sales have also remained firm, driven by rising incomes, improved affordability, and better connectivity. Homebuyers have been encouraged to upgrade their living spaces, leading to a consistent demand in the housing market. The demand for warehousing has remained strong as well, fueled by improvements in logistics and the needs of sectors such as e-commerce, engineering, and automobiles. Institutional investors have shown increased interest in mixed-use assets and emerging categories like data centers, senior living, and co-living, driven by demographic and digital shifts.
These trends have helped Tier II and III cities gain more attention, creating a broader base for future growth. The report suggests that these cities are becoming more attractive for real estate investments due to their potential for expansion and development.
Looking ahead to 2026, Colliers expects the sector to maintain its momentum, with both commercial and residential demand remaining healthy. Steady occupier interest, growing homeownership, and improved infrastructure are expected to guide the next phase of growth. The industrial, warehousing, and alternative assets segments are likely to benefit further from expanding manufacturing and modernizing supply chains.
Investor participation is expected to remain strong, driven by REITs, SM REITs, InvITs, and AIFs, which make real estate investing more accessible. The report emphasizes that ESG-linked decisions and technology-led buildings will play a crucial role in shaping long-term strategies.
In the office market, India has already crossed 50 million square feet of leasing in the first nine months of 2025, primarily driven by Global Capability Centres (GCCs). By the end of the year, Grade A demand is expected to reach nearly 70 million square feet. In 2026, demand is likely to settle around 70-75 million square feet as occupiers increasingly seek high-quality, tech-enabled, and sustainable spaces. GCCs are expected to expand further, while flex workspaces may account for about one-fifth of Grade A leasing.
The report also highlights a shift toward workplace designs that incorporate AI, IoT, and automated systems to improve efficiency and reduce costs. Sustainability will become a central focus, with most new supply expected to be green certified.
In the housing sector, sales in 2025 have remained steady, supported by improved affordability and infrastructure improvements across major cities. Colliers anticipates that this momentum will continue in 2026, driven by urbanization and rising lifestyle needs, which are expected to boost demand for premium homes, plotted developments, and gated communities.
Tier II and III cities are set to see more activity as developers expand into new markets. The report also notes emerging interest in redevelopment, driven by supportive urban policies and the growing adoption of fractional ownership models in premium housing.
Overall, the real estate sector in India is well-positioned for continued growth and innovation, with a strong focus on sustainability and technology.
