NEW DELHI: According to the Knight Frank-NAREDCO Real Estate Sentiment Index, sentiment in India’s real estate market stabilized in the October–December quarter of 2025, with both current and future outlooks remaining positive.
The Current Sentiment Score for Q4 2025 rose to 60, an increase from 59 in the previous quarter, while the Future Sentiment Score held steady at 61, indicating balanced expectations for the next six months. Although these levels are lower than the peaks recorded in 2023-24, they suggest a market buoyed by stable macroeconomic conditions, decreasing inflation, and availability of funding.
The report highlights that enhanced economic clarity has alleviated concerns over global uncertainties. Shishir Baijal, International Partner, Chair, and Managing Director of Knight Frank India, stated, “The real GDP growth of 8.2% in Q2 FY 2025–26, compared to 5.6% in the same period last year, has bolstered stakeholder confidence.”
Sentiment regarding funding availability improved as most respondents anticipated stable or enhancing liquidity conditions. Although lenders and investors are cautious, the capital access remains supportive across asset classes due to consistent policies and a focus on quality.
Regionally, there was a modest improvement in future sentiment across all zones, each remaining in optimistic territory. The South Zone led with a score of 62, bolstered by strong office leasing in Bengaluru and Hyderabad and ongoing demand in high-end residential segments. The East and West Zones also achieved scores of 62, reflecting stable housing demand and commercial activity. Meanwhile, the North Zone rebounded to 59, indicating stabilisation after earlier weaknesses, thanks to office market activity and infrastructure developments.
Institutional stakeholders, including banks and private equity funds, reported a Future Sentiment Score of 63, indicating greater confidence in asset quality and liquidity. Developers, however, exhibited more caution, with a future sentiment score of 58, highlighting their focus on aligning new supply with demand visibility and financial discipline.
Residential sentiment showed slight improvement during this quarter, spurred by steady demand in higher-ticket segments and controlled supply. Developers are strategically managing launches and focusing on inventory. While sales have moderated from previous highs, favorable financing conditions and stable end-user demand have helped to maintain confidence.
Parveen Jain, President of NAREDCO, commented, “Residential markets are demonstrating clearer signs of stability, supported by steady end-user demand and a disciplined approach to new supply. The office segment remains robust, driven by consistent leasing and corporate expansion. Positive macroeconomic visibility, easing inflation, and policy continuity have further strengthened confidence across regions.”
The office segment continued to support overall market sentiment in Q4 2025. Leasing expectations were strong, driven mainly by demand from Global Capability Centres (GCCs) in major markets. The limited availability of quality Grade A office space has fueled pre-leasing activity and firm rental expectations, with most stakeholders believing that rental rates will either hold steady or increase.
The report indicates that India’s real estate sector is entering 2026 on solid ground, underpinned by improving macroeconomic clarity, prudent capital investment, and demand-driven strategies across both residential and commercial sectors.
