India’s sustained economic momentum, policy stability and steady end-user demand reinforced the real estate sector in 2025, underpinning strong fundamentals across residential, commercial, retail, logistics, warehousing and data centres.The housing market maintained its upward momentum, led by premium and luxury housing, with homes priced above Rs 10 crore accounting for over half of sales across major cities, according to Knight Frank India data.End-user demand, rather than investor activity, drove the market, sustaining absorption even as prices rose across key metros, with Bengaluru, Hyderabad, Chennai and Delhi NCR recording double-digit appreciation.“The progress made in 2025 has reaffirmed our belief in the underlying strength of India’s real estate sector. What we are witnessing is not just a cyclical upswing, but a structural realignment built on genuine demand, better governance, maturing capital, and a deepening trust in India’s long-term economic trajectory,” said Shishir Baijal, International Partner, CMD, Knight Frank IndiaAccording to him, as India advances steadily towards a $1 trillion real estate economy by the end of the decade, growth opportunities are expected to remain firm.Live EventsDuring the year, developers increasingly pivoted to premium projects focused on brand, sustainability, and technology, while affordable housing remained under pressure from higher costs and limited financing, underscoring the need for policy support.Tier-2 and Tier-3 cities continued to gain share, driven by infrastructure upgrades, rising incomes and state-level reforms, marking a key structural shift in the residential market.India’s office market delivered one of its strongest performances in a decade, with demand from multinational corporations, GCCs, technology firms and consulting companies remaining resilient despite global headwinds. Gross office absorption is expected to cross 80 million sq ft in 2025, reinforcing India’s position as a global talent and enterprise hub, with GCC expansion emerging as a key growth driver, Knight Frank India said.Flexible workspaces saw record expansion as hybrid work stabilised and occupiers shifted to agile, specialised formats, placing India among the world’s fastest-growing flex markets.Retail real estate rebounded in 2025, with high streets and malls adopting experiential formats to drive footfalls and conversion, while logistics, warehousing and data centres strengthened their status as core investment segments amid e-commerce growth, manufacturing reforms, and rapid digital infrastructure expansion.OutlookAccording to the property consultancy, demand is expected to strengthen further in the premium and luxury housing segments, driven by rising incomes and deeper global integration, while a modest cut in interest rates could spur a fresh wave of first-time buyers.The office market is likely to sustain momentum, led by GCCs, technology firms and global occupiers, reinforcing India’s role as a key operations hub, with flexible workspaces becoming more specialised.Tier-2 and Tier-3 cities are set to play a larger role in residential and commercial growth, aided by infrastructure rollout and decentralisation. However, affordable, and mid-income housing will need targeted policy support, as trust in governance, developers, infrastructure delivery, and institutional capital emerges as a key factor shaping the next phase.
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