Premium Property Boom Fuels India's Real Estate Recovery in Q2 2025
The Knight Frank-NAREDCO Real Estate Sentiment Index rose to 56 in Q2 2025 from 54 in Q1, marking a significant improvement in the sector's outlook, particularly in premium housing segments.
Real EstatePremium PropertyMarket RecoveryDelhincrHousing DemandReal EstateJul 31, 2025
With developers tailoring new launches to meet evolving lifestyle preferences and urban expansion patterns, the premium housing segments, particularly properties exceeding Rs 1 crore, have emerged as a key driver of growth. Approximately 70% of stakeholders anticipate that residential launches will either remain steady or increase in the coming months, with the Rs 1 crore-plus segment outperforming due to strong demand in select markets.
According to the report, 94% of the stakeholders anticipate that home prices will either stay the same or increase, consistent with the previous quarter’s outlook. Cities like Delhi-NCR, Bengaluru, and Chennai have reported double-digit year-on-year price growth, fueled by limited fresh supply and demand for branded homes with lifestyle amenities.
South India leads regional sentiment with a Future Sentiment score of 63, driven by Bengaluru and Hyderabad’s commercial strength and lifestyle housing demand. The West and East zones scored 61, while the North (Delhi-NCR) rebounded from 48 to 55, thanks to improved infrastructure and rising premium property focus.
In the Delhi-NCR region, the real estate market is witnessing a robust resurgence, particularly in the luxury and ultra-luxury segments. The region recorded an 81% increase in average property prices from Rs 4,580 per sq ft in 2020 to Rs 8,300 per sq ft in Q1 2025, with Greater Noida leading a 98% price surge to ₹6,600 per sq ft. Noida followed closely with a 92% rise, reaching Rs 9,200 per sq ft. The decline in unsold inventory by 51% from 1.73 lakh units in Q1 2020 to 84,500 units in Q1 2025 further underscores the region’s strong demand, particularly for high-end homes priced above Rs 2.5 crore, which accounted for 59% of new launches in 2024. This growth is supported by structural reforms like RERA and the SWAMIH fund, alongside infrastructure developments enhancing connectivity.
“The Knight Frank-NAREDCO report highlights a pivotal recovery in India’s real estate market, driven by strong demand for homes priced above Rs 1 crore. In Delhi-NCR, enhanced infrastructure and a clear focus on premium properties have fuelled this resurgence, lifting the North zone’s Sentiment Score from 48 in Q1 to 55 in Q2 2025. This improvement reflects growing confidence among end-users and investors alike, underscoring a positive outlook for the region’s realty sector. With favourable financing conditions and rising demand, Delhi-NCR is set to maintain this upward momentum through the remainder of 2025,” Rahul Singla, director of Mapsko Group, commented.
Adil Altaf, managing director of Trinity, said, “The latest Knight Frank-NAREDCO report signals a vital recovery for Delhi NCR’s real estate in Q2 2025. The region’s sentiment score jumped from 48 in Q1 to 55 in Q2, driven by improving infrastructure and strong demand for premium homes above Rs 1 crore. Improved infrastructure, easier borrowing conditions, and a renewed sense of optimism among homebuyers and developers are key reasons behind this positive shift. At ground level, families are seeking quality living with better amenities, and developers are stepping a notch to meet these expectations.”
Rakesh Malhotra, founder and chairman of PRIME Developments, said, “Knight Frank’s Q2 2025 findings highlight renewed momentum in Delhi NCR’s housing market, especially for residences priced over Rs 1 crore. The region has seen a decisive shift, with upbeat sentiment and a deliberate focus on the premium segment across select micro-markets. Developers are more confident today, thanks to falling interest rates and a collaborative focus with financial institutions. People are looking for homes that match their evolving lifestyles. The palpable sense of recovery and forward thinking is energising the entire region’s property sector.”
Frequently Asked Questions
What is the Knight Frank-NAREDCO Real Estate Sentiment Index?
The Knight Frank-NAREDCO Real Estate Sentiment Index is a measure of stakeholder confidence in India's real estate market. It tracks the sentiment of developers, investors, and other industry players regarding the current and future performance of the sector.
Why is the premium property segment performing well in Q2 2025?
The premium property segment is performing well due to robust demand for homes priced above Rs 1 crore, improved infrastructure, and favorable financing conditions. Additionally, developers are focusing on high-demand micro-markets and tailoring new launches to meet evolving lifestyle preferences.
Which regions are leading the real estate recovery in India?
South India, particularly cities like Bengaluru and Hyderabad, is leading the recovery with a Future Sentiment score of 63. The West and East zones also scored 61, while the North (Delhi-NCR) region showed significant improvement, rebounding from 48 to 55.
What factors are driving the real estate recovery in Delhi-NCR?
The real estate recovery in Delhi-NCR is driven by improved infrastructure, a focus on premium properties, and a strong demand for high-end homes priced above Rs 2.5 crore. Additionally, structural reforms like RERA and the SWAMIH fund, along with enhanced connectivity, are supporting this growth.
How do developers and investors view the future of the real estate market in India?
Developers and investors are increasingly optimistic about the future of the real estate market in India. The Future Sentiment Score has climbed to 61, reflecting growing confidence in the sector’s performance over the next six months. They are particularly positive about the premium property segment and the overall market recovery.
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