India's Real Estate Sector: Growth Continues Despite July Dip
India's real estate sector remains in a growth cycle despite a July slowdown, according to Gulam Zia, Senior Executive Director at Knight Frank India. He attributes the dip to seasonal factors and expects festive demand to revitalize the market.
Real EstateGrowth CycleKnight FrankGulam ZiaOffice MarketReal Estate NewsAug 28, 2025
Overall, about 80% of the real estate sector is residential, with the rest being offices and retail. So far, the first three quarters have been pretty much equal to last year’s year-on-year numbers, so nothing to worry about, Zia told CNBC-TV18. He added, Some say we are close to the 12 o’clock position on the property clock. But I don’t think we’re there yet—maybe at 11 o’clock. We need to pause, reflect, and watch the next couple of quarters.
On the retail front, Zia said the segment has remained steady, though tier-2 and tier-3 cities face pressure from excess mall supply. In Mumbai, Delhi, Bengaluru, seven to ten malls are doing fairly well, with two or three performing exceptionally well. But in smaller cities, having a third or fourth mall can be serious trouble.
The office market, on the other hand, continues to perform strongly. Last year saw 70 million square feet of space absorbed, and this year is on track to reach 85 million. Rentals are also rising by 5–7% on average, with Bengaluru and Mumbai seeing double-digit growth. So far, the office sector has not been affected by tariff wars or global uncertainty. For now, it is doing fabulously well, Zia said.
In residential real estate, affordable housing remains undersupplied, while ultra-luxury properties face some stress. Homes priced below ₹50 lakh are selling out within two years, but projects in the ₹20–50 crore bracket could take up to five years to clear. Overall, unsold inventory remains healthy, with an average absorption period of 2.5 to 3 years.
Zia also noted that city-wise trends differ. While Mumbai’s July sales matched last year’s levels, Delhi and Bengaluru have been weak, whereas Chennai and Pune are showing strong growth.
On concerns around the July slowdown highlighted by Morgan Stanley, Zia dismissed them as temporary. I would not be unduly worried, because in a few days we will be entering the shraadh paksha. This is the period when transactions typically take a backseat. Post that, during Dussehra and Diwali, we’ll see huge interest coming back. This is just a temporary blip, nothing more than that.
Frequently Asked Questions
What is the current state of India's real estate sector?
India's real estate sector is in a growth cycle, with a July dip attributed to seasonal factors. The residential, office, and retail segments are all showing resilience.
What does Gulam Zia think about the July slowdown?
Gulam Zia, Senior Executive Director at Knight Frank India, believes the July slowdown is a seasonal blip and expects market momentum to revive during festive seasons like Dussehra and Diwali.
How is the office market performing?
The office market is performing strongly, with 70 million square feet of space absorbed last year and an expected 85 million this year. Rentals are rising by 5–7% on average, with Bengaluru and Mumbai seeing double-digit growth.
What are the trends in residential real estate?
Affordable housing priced below ₹50 lakh is selling out quickly, while ultra-luxury properties in the ₹20–50 crore bracket are taking longer to clear. Unsold inventory remains healthy with an average absorption period of 2.5 to 3 years.
What are the city-wise trends in the real estate market?
Mumbai’s July sales matched last year’s levels, while Delhi and Bengaluru have been weak. In contrast, Chennai and Pune are showing strong growth.
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