India's Real Estate Sector Set for Steady and Sustainable Growth in 2026
New Delhi: As India entered 2026, the real estate sector is positioned for measured yet sustainable growth across all major segments, according to industry experts. Strong fundamentals, expanding premium housing, and adaptive retail and logistics ecosystems will continue to attract both domestic and international capital. Despite the macroeconomic and geopolitical challenges of 2025, 2026 is expected to be a year of recalibration and renewed economic momentum.
This optimistic outlook is supported by India’s strong GDP growth of 8.2 per cent in Q2 FY26, recorded despite global uncertainties and shifting trade dynamics. With this strong growth rate, the nation remains firmly on track to become the world’s third-largest economy by 2030, with an estimated GDP of $7.3 trillion, according to Shrinivas Rao, FRICS, CEO of Vestian. To reinforce economic development, the government implemented a robust mix of fiscal and monetary measures. Fiscal steps included the rationalization of GST rates and revisions in income tax slabs.
On the monetary front, the Reserve Bank of India (RBI) reduced the repo rate to 5.25 per cent and maintained a neutral stance, a move that is expected to bolster economic activity in 2026. Overall, the year is poised to witness holistic sectoral growth, strengthened real estate activity, and improved investor sentiment, Rao mentioned. The office market is projected to maintain its upward trajectory in 2026. According to Vestian Research, gross absorption is expected to reach 75–80 million square feet, driven largely by sustained expansion from Global Capability Centres (GCCs).
The IT-ITeS and BFSI sectors will also remain key contributors. Flex space operators are anticipated to further consolidate their presence as occupiers prioritize agility and hybrid workplace models. Leasing activity will be led by Bengaluru, Chennai, and Hyderabad, with Mumbai and Pune expected to record an increased share, said Rao. According to Prashant Sharma, President of NAREDCO Maharashtra, the year 2025 has been a landmark period for India’s real estate sector, marked by significant policy reforms, robust demand across asset classes, and a renewed focus on sustainable urbanisation.
Tier-II and Tier-III cities are set to play a larger role in India’s real estate growth story in 2026. Improved connectivity, rising employment opportunities, and emerging industrial corridors will shift demand beyond metros. Aniket Dani, Director of Crisil Intelligence, noted that the outlook for fiscal 2027 is more optimistic, with demand recovery driven by rising incomes, lower interest rates, and continued infrastructure improvements.
In contrast, commercial real estate is projected to continue its growth trajectory this fiscal — with demand rising 5-7 per cent and supply 9-11 per cent — fuelled by strong leasing from global capability centres, flexible workspace operators, and the IT/ITeS and BFSI sectors.
