Mumbai: India’s real estate sector continued its strong upward momentum in the third quarter of 2025, driven by a surge in office leasing, rising demand for high-ticket residential projects, and a favourable macroeconomic environment. These findings are highlighted in the latest Knight Frank–NAREDCO report, which reflects growing optimism across the industry.
Sentiment Index Shows Marked Improvement
According to the report, the current sentiment score of the Real Estate Sentiment Index rose from 56 to 59, indicating stronger confidence among developers and investors. Meanwhile, the future sentiment score held steady at 61, showcasing a sustained positive outlook for the coming months. The report attributes this optimism to improved liquidity, controlled inflation, and policy stability—factors that have collectively strengthened market confidence.
Office Segment Leads the Growth Momentum
The office segment emerged as the strongest performer this quarter. With new supply and stable occupancy levels, it remained the most optimistic category within real estate. Nearly 78 percent of participants believe that India’s economic activity will stay steady or improve further, positively impacting corporate leasing demand. Additionally, 78 percent of stakeholders expect new supply to remain stable or register moderate growth, indicating disciplined launches by developers to avoid oversupply.
Funding Environment Remains Supportive
The funding outlook remains constructive, with 86 percent of respondents anticipating stable or improved financial conditions. The RBI’s accommodating stance, along with increased capital infusion into premium housing and commercial properties, is expected to ease project financing and support sectoral growth. The report further notes that 95 percent of participants believe office rentals will remain stable or rise, driven by limited Grade-A supply and strong leasing momentum.
South Zone Outperforms Other Regions
NAREDCO President Parveen Jain observed that consistent demand, policy continuity, and a healthy funding climate have reinforced confidence among developers and investors. The demand for premium housing and office spaces continues to strengthen sector performance. Region-wise, the South Zone led the charts with a score of 62, powered by strong office leasing and luxury housing demand in Bengaluru and Hyderabad. The North Zone recorded a score of 56, supported by stable NCR office activity, while the East Zone stood at 59, reflecting steady expectations among stakeholders.
