There is a cautiously optimistic mood among real estate stakeholders. There is a growing stakeholder caution amid global trade tensions, economic recalibration, and regional volatility. Despite this, positive momentum in commercial real estate and sustained activity in high-value residential segments continue to support sentiment resilience.
Hari Babu, President-NAREDCO, said, “The Indian real estate sector is showcasing robust performance in the commercial segment, driven by the demand from Global Capability Centres (GCCs) and tech-enabled enterprises — reaffirming India’s growing stature as a global business hub. On the residential front, developers are adopting a more mature, demand-led approach by focusing on high-ticket projects while rebalancing supply in the mid and affordable segments. This is a sign of steady evolution. We see this as a phase of mindful progress, where Indian real estate is not just expanding, but doing so with greater purpose and prudence. Government-led infrastructure development and the expansion of real estate in Tier 2 and 3 cities will continue to support the sector. Additionally, the recent repo rate cut by the RBI has boosted liquidity and improved buyer sentiment, giving further momentum to the industry. We remain confident in the sector’s potential and its pivotal role in India’s economic journey.”
According to the Knight Frank survey findings, residential outlook leans toward stability amid cautious launch plans. In Q1 2025, 93% of stakeholders expect residential prices to remain stable or improve, while 67% anticipate stability or growth in new launches. Residential sales sentiment, however, has moderated with only 50% expecting it to either improve or stay the same compared to 88% in Q1 2024.
The residential sentiment in Q1 2025 reflected a clear shift toward stability and cautious optimism. While overall enthusiasm has moderated compared to the highs of 2023 and early 2024, the market continues to show resilience, particularly in higher ticket size segments. This softening is driven by moderation in demand within the mid and lower ticket-size segments, where affordability concerns and truncated supply led to demand deceleration.
Launch activity has also moderated and price sentiment remains largely positive. There is a gradual shift away from aggressive price growth toward a more measured and sustainable pricing environment.
The office segment remains a bright spot, supported by robust leasing activity and stable rental growth. The office sector continued to display strength in Q1 2025, backed by robust occupier demand and rental resilience. Majority stakeholders expect leasing activity to either increase or remain stable, driven by sustained expansion from Global Capability Centres, third party IT services firms, and flex space operators. While a few foresee an increase in new office supply, and some anticipate stability, reflecting developers’ calibrated approach amid high office space absorption. Rents remain on a firm footing, expected them to stay stable or rise.
In Q1 2025, stakeholders expecting economic momentum to either improve or remain stable has moderated, reflecting concerns over global trade volatility, and recent cross-border developments. However, the Reserve Bank of India’s consecutive repo rate cuts in February and April are expected to support consumption and investment, providing a foundation for economic recovery in the months ahead.
Funding sentiment remains steady, as the recent rate cuts have enhanced liquidity and reduced borrowing costs.
