India's real estate sentiment stabilises, outlook optimistic in Q4 2025

Sentiment in India's real estate sector stabilised in Q4 2025, with both current (60) and future (61) outlooks remaining optimistic, per the Knight Frank-NAREDCO index. This stability is supported by improving macroeconomic visibility.

Sentiment in India's real estate sector stabilised in the October-December quarter of 2025, with both current and future outlook remaining firmly in the optimistic zone. As per the 47th edition of the Knight Frank-NAREDCO Real Estate Sentiment Index the Current Sentiment Score inching up to 60 in Q4 2025 from 59 in the previous quarter, while the Future Sentiment Score remained unchanged at 61.

The readings indicate balanced expectations for the next six months, supported by improving macroeconomic visibility, easing inflationary pressures and steady funding conditions.

Resilient Demand Underpins Confidence

Despite sentiment levels remaining below the highs recorded during 2023-24, resilient office demand, improving liquidity conditions and stable domestic economic fundamentals continued to underpin confidence across the sector, the report noted.

Improved Funding Outlook

It further highlighted an improvement in sentiment around funding availability during the quarter, with a majority of stakeholders expecting liquidity conditions to remain stable or improve. While lenders and investors remain selective, access to capital continues to be supportive across asset classes, aided by policy continuity and a focus on quality assets.

Regional Sentiment Analysis

Regionally, future sentiment improved modestly across all zones, with every region remaining in optimistic territory. The South Zone retained the highest score at 62, supported by strong office leasing in Bengaluru and Hyderabad, while the West and East zones also recorded scores of 62. The North Zone recovered to 59, reflecting stabilising sentiment after weakness in earlier quarters.

Stakeholder Perspectives

Institutional stakeholders, including banks, financial institutions and private equity funds, reported stronger confidence levels, with a Future Sentiment Score of 63. Developers, however, remained more cautious, recording a score of 58, underscoring a continued emphasis on disciplined growth and demand-led expansion.

Sector-Specific Performance

The office segment continued to anchor overall market confidence during the quarter, driven by sustained occupier demand, particularly from Global Capability Centres, and limited availability of quality Grade A space. Residential sentiment also improved, supported by steady demand in higher ticket-size segments and controlled supply additions.

Outlook for 2026

Knight Frank-NAREDCO report said India's real estate sector is entering 2026 on a steadier footing, backed by improving economic clarity, prudent capital deployment and demand-driven strategies across asset classes. (ANI)

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