NEW DELHI: Sentiment in India’s real estate sector stabilised in the October–December quarter of 2025, with both current and future outlooks remaining in the optimistic zone, according to the Knight Frank–NAREDCO Real Estate Sentiment Index.
The Current Sentiment Score in Q4 2025 inched up to 60 from 59 in the previous quarter, while the Future Sentiment Score remained unchanged at 61, indicating balanced expectations for the next six months. Although sentiment levels are lower than the peaks recorded in 2023–24, they reflect a market supported by steady macroeconomic conditions, easing inflation and stable funding availability.
According to the report, improving economic visibility has helped offset global uncertainties. Shishir Baijal, international partner, chairman and managing director, Knight Frank India, said, “Real GDP growth of 8.2% in Q2 FY 2025–26, compared with 5.6% in the same period last year, has reinforced confidence among stakeholders.”
Funding availability sentiment improved during the quarter, with most respondents expecting liquidity conditions to remain stable or improve. While lenders and investors continue to adopt a selective approach, access to capital remains supportive across asset classes, aided by policy continuity and a focus on quality assets.
Regionally, future sentiment improved modestly across all zones, with each remaining in optimistic territory. The South Zone led with a score of 62, supported by strong office leasing activity in Bengaluru and Hyderabad and steady demand in higher ticket residential segments. The East and West Zones also recorded scores of 62, reflecting stable housing demand and commercial market activity. The North Zone recovered to 59, indicating stabilisation after weakness earlier in the year, aided by office market traction and ongoing infrastructure activity.
Institutional stakeholders, including banks, financial institutions and private equity funds, reported a higher Future Sentiment Score of 63, pointing to increased confidence in asset quality and liquidity conditions. Developers remained relatively more cautious, with a future sentiment score of 58, reflecting a continued emphasis on aligning new supply with demand visibility and maintaining financial discipline.
Residential sentiment improved marginally during the quarter, supported by steady demand in higher ticket size segments and controlled supply additions. Developers continued to calibrate launches and focus on inventory management. While sales momentum has moderated from previous highs, improved financing conditions and stable end-user demand have helped sustain confidence.
Parveen Jain, president, NAREDCO, said, “Residential markets are showing clearer signs of stability,
supported by steady end-user demand and a disciplined approach to new supply. The office segment
remains positive, backed by consistent leasing activity and corporate expansion. Improving
macroeconomic visibility, easing inflation, and policy continuity have further reinforced broad-based
confidence across regions.”
The office segment continued to anchor overall market sentiment in Q4 2025. Leasing expectations remained strong, driven by consistent occupier demand, particularly from Global Capability Centres (GCCs), across major markets. Limited availability of quality Grade A office space has supported pre-leasing activity and firm rental expectations, with most stakeholders anticipating rentals to remain stable or strengthen.
The report suggests that India’s real estate sector is entering 2026 on a steadier footing, underpinned by improving macroeconomic clarity, prudent capital deployment and demand-led strategies across residential and commercial segments.
