India Real Estate Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

India Real Estate Market Trends and Insights

GCC/IT-ITeS Expansion and Manufacturing/Warehousing Growth Fueling Commercial and Industrial Demand

Global Capability Centers are reshaping net absorption, with their share of office demand projected at 40% in 2025 as technology and research mandates expand footprints in Bengaluru, Hyderabad, and Chennai. India’s office market is expected to record 40 to 45 million square feet of net absorption in 2025, led by the top metros with balanced contributions from Bengaluru, Delhi NCR, Mumbai, Hyderabad, and Chennai. Industrial and logistics leasing reached 27.1 million square feet in H1 2025, up 63% year over year, with e-commerce operators lifting their share to 25% and foreign corporates accounting for 43% of Q2 2025 space take-up. Manufacturers plan to scale operations and expand into Tier-2 and Tier-3 cities over the next two to three years, and policymakers earmarked funding for plug-and-play parks to support faster set-up. Collectively, these forces underpin a durable leasing cycle across offices, warehouses, and ancillary assets in the India real estate market.^{[2]https://www.cbre.co.in/}

Urbanization and Rising Incomes Driving Housing Demand Across Metros and Growth Corridors

Urbanization and income growth continue to reshape residential absorption in India’s top cities, with demand tilting toward employment-rich corridors and well-connected suburban nodes. The urban population is projected to reach 600 million by 2030, and this shift is visible in the concentration of new launches and sales in metro-adjacent growth corridors. Inventory rotation is improving in markets where developers calibrate launches to match premium demand, as seen in Pune’s quarters-to-sell levels that have hovered near cycle lows. Affordability pressure at lower ticket sizes is pushing some first-time buyers toward rentals and peripheral locations, while higher-income households continue to lead sales in premium projects near transit and job hubs. New metro lines and expressways are reinforcing this pattern by shortening commutes and linking residential catchments to CBDs and airports, which sustains pricing resilience in select micro-markets. The result is a more segmented India real estate market where premium and mid-income stock turn faster, while sub-USD 120,000 housing remains supply-constrained in Tier-1 cores.^{[3]https://www.icra.in/}

Home Loan Availability and Stable EMIs Supporting Affordable and Mid-Income Segments

Mortgage availability and steady EMIs help sustain end-user demand, particularly in Tier-1 and Tier-2 cities, where formal incomes enable access to credit. Banks and housing finance companies have focused origination on compliant projects with clear title and escrow safeguards, improving risk selection across the lending system. Affordability metrics have improved in select markets on an EMI-to-income basis, although the absolute ticket sizes in Tier-1 cores remain high for first-time buyers. Developers are aligning launches with mid-income and premium demand and are using better phasing to manage cash flows through construction cycles. The near-term effect is a floor under volumes for the India real estate market when financing is available against well-located projects and demand visibility is strong.

Regulatory Reforms and Formalization Improving Transparency and Investor Confidence

The enforcement phase of state RERA authorities has strengthened compliance and buyer safeguards, which in turn has encouraged more formal capital to participate. Maharashtra’s authority suspended registrations of 1,905 housing projects for non-compliance and directed that homebuyers receive compensation within defined timelines, tightening accountability for delays. Insolvency resolution timelines have been long, with the average Corporate Insolvency Resolution Process closure at 713 days through March 2025, which underscores execution risk that lenders must price. Even with these constraints, scheduled commercial bank credit to real estate grew on a year-over-year basis into March 2025, reflecting a bias toward RERA-compliant projects with transparent escrow structures. The government’s SWAMIH-2 program allocated INR 15,000 crore (USD 1.8 billion) to deliver last-mile funding to stalled projects, which supports completions and protects buyer interests. These measures are incrementally raising standards and providing clearer exit pathways, which bolsters confidence for the India real estate market.

Land Acquisition, Approvals, and Compliance Timelines Delaying Project Execution

Land aggregation, land-use conversion, and multi-agency approvals can stretch project timelines beyond developer cash-flow tolerances in dense metros. Insolvency resolution has been slow, with average CIRP closures at 713 days as of March 2025, which is well beyond statutory timelines and increases the cost of capital. Maharashtra’s RERA authority suspended registrations of 1,905 housing projects for non-compliance and directed remedies for homebuyers, which raises the execution bar for developers with weaker balance sheets. Uttar Pradesh has eased farmland conversion for some residential schemes by allowing local authorities to approve certain transitions from agricultural to residential use, which can speed up select projects. Courts have also nudged stricter accountability, including interest parity for delayed possession relative to penalties charged to buyers, which feeds into feasibility models and risk pricing. These constraints slow supply velocity in the India real estate market, especially in land-scarce corridors where approvals remain complex.

Construction Cost Escalation and Funding Constraints for Smaller Developers

Input costs for cement, steel, and labor have increased, while labor code changes are expected to lift wage-related outflows by 8% to 12% and raise Provident Fund and gratuity liabilities. Taxes remain a high component of property costs, although GST cuts on housing and materials have partially reduced the burden, creating a net relief that does not fully offset input inflation. A recent poll of economists and property analysts expects home prices to rise from 2025 to 2027, which points to margin recovery by developers rather than full pass-through of tax relief to buyers. Industry bodies have urged a revision to the affordable housing price cap from INR 45 lakh (USD 54.2 thousand) to INR 90 lakh (USD 108.4 thousand), given the cumulative inflation since the cap was set in 2017. Funding costs for smaller NBFCs and HFCs remain higher than bank peers, and associations have asked for refinance support and risk-weight alignment to improve credit availability to underserved borrower segments. Private credit is filling some gaps through project-specific financing and refinancing, which preserves momentum in the India real estate market despite higher pricing.

Segment Analysis

By Business Model: Rental segment scales as institutional capital pursues stabilized yields

Sales accounted for 69.5% of the India real estate market size in 2026. The Rental segment is projected to be the fastest-growing at a 10.99% CAGR through 2031, which reflects a broad institutional shift toward stabilized, income-generating assets across offices, retail, warehousing, and emerging alternative asset classes. GCC-rich office markets prefer long-duration leases to limit balance sheet risk, and these preferences are set to hold as MNCs scale R&D and tech hubs. Logistics and warehousing users are increasingly opting for build-to-suit agreements that match network optimization needs as e-commerce operators lifted their share of industrial leasing to 25% in H1 2025. Across operational portfolios, listed REITs reported near-91% occupancy in September 2025 and distribution yields in the 6% to 7% range in FY 2025, which signals durable rental cash flows that support incremental allocations. These income characteristics underpin the steady institutionalization of the leasing model in the India real estate market.

The availability of untapped debt capacity at listed REITs, estimated near INR 230 billion (USD 2.8 billion), supports acquisition-led growth without equity dilution, while strong capital market access has enabled marquee transactions and QIPs. Recent examples include Brookfield India REIT’s acquisition of a 50% stake in a 3.3 million square foot North Commercial Portfolio for INR 12.28 billion (USD 148.0 million) and a follow-on raise of INR 47 billion (USD 566.3 million) that broadened the investor base. On the Sales side, top-listed developers delivered record bookings in calendar 2024, with Godrej Properties reporting INR 28,800 crore (USD 3.5 billion) of sales on the back of active land acquisition and joint development agreements. At the same time, insolvency and approval timelines continue to raise execution risk for sales-led projects, which sustains investor preference for leased and stabilized assets. The balance of these factors supports the Rental segment’s status as the structural growth leader in the India real estate market over the forecast period.

By Property Type: Commercial outpaces residential as GCC mandates reshape office absorption

Residential captured 70.1% of the India real estate market size in 2026. Commercial is projected to grow at a 10.79% CAGR through 2031, backed by GCC expansions and logistics build-outs to serve consumption and manufacturing growth. India’s office market is expected to record 40 to 45 million square feet of net absorption in 2026, with Bengaluru, Delhi NCR, Mumbai, Hyderabad, and Chennai driving the bulk of the total. On the demand side, GCCs are projected to account for 40% of total office demand in 2025, up from the mid-30s in 2024, as multinationals deepen engineering and analytics capabilities in India. Industrial and logistics leasing hit 27.1 million square feet in H1 2025, up 63% year over year, with e-commerce more than doubling its share and foreign corporates capturing a larger share of quarterly take-up. In retail-led commercial, consolidation moves such as Phoenix Mills’ buyout of CPPIB’s 49% interest in Island Star Mall Developers for INR 5,449 crore (USD 656.5 million) will enable more integrated control and potential monetization options.

Residential remains the largest volume contributor, although the composition has shifted toward higher-ticket homes near transit corridors. Chennai bucked the national trend with a 24% rise in Q2 2025 residential sales, supported by the 118.9-kilometer Metro Phase II build and strong South and West corridor connectivity. New launches have tilted toward mid-income and premium formats in many metros, as seen in Bengaluru, where premium launches outpaced mid-segment additions in 2025. In the office sub-segment, quarterly gross leasing volumes in Bengaluru remained high, and GCCs led net absorption with significant contributions from engineering and manufacturing. Together, these patterns support commercial outperformance in the India real estate market through the forecast, while Residential continues to provide the base demand in well-connected micro-markets.

By End-user: Corporate and SME leasing surges as GCC footprint expands

Individuals and Households accounted for 66.1% of transaction value in 2026, and Corporates and SMEs are projected to lead growth with an 11.01% leasing CAGR through 2031. GCCs drive a rising share of leasing and are expected to account for 40% of office demand in 2025, with Bengaluru the top destination and Chennai, Hyderabad, and Pune increasing their contributions. Industrial users are scaling footprints to match India’s role in global supply chains, and foreign corporates accounted for 43% of Q2 2025 industrial leasing across APAC, American, and EMEA tenants in India. E-commerce operators also lifted their leasing share as they reconfigure networks for faster delivery, which supports large build-to-suit pipelines in the India real estate market. New digital infrastructure is expanding, with Google announcing USD 6 billion for a 1 GW data center in Andhra Pradesh and the Adani Group outlining USD 10 billion for a 10 GW portfolio across multiple states.

Individuals and Households remain the core of residential demand, although mid to higher ticket sizes have grown their share in 2025 as entry-level affordability remains tight in Tier-1 cores. Corporates and SMEs continue to benefit from flexible workspace options and turnkey warehouse solutions, which allow asset-light expansion while preserving balance sheet agility. BFSI and IT-ITeS are major drivers of office absorption in Chennai and Hyderabad, where recent quarters saw high net absorption and elevated contributions from GCCs and flexible operators. As flexible leasing formats and data center ecosystems mature, corporate-led demand should continue to outpace household-led activity on a growth rate basis in the India real estate market.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Mumbai Metropolitan Region held 28.4% of total revenue in 2026, supported by a fiscal 2024-25 transaction value that crossed INR 1.55 lakh crore (USD 18.7 billion). The underground Metro Line 3 corridor is designed to reduce north-south travel times by 40% to 50% and connect CBDs such as Bandra Kurla Complex, Worli, and Dadar with major residential catchments and the airport. Luxury registrations above INR 5 crore maintained a firm share of total transactions, and absorption in Bandra, BKC, Parel, and Worli stayed steady due to lower redevelopment density and constrained future supply. Affordability improved in nominal terms in 2025 as EMI-to-income fell below 50% in Mumbai for the first time, but absolute prices and upfront costs remain a challenge for first-time buyers in core locations. Delhi NCR is on track to post one of the strongest price increases among major cities for 2025, while upcoming launches in Gurugram and Noida add to supply depth in the mid and premium ranges. Signature Global’s launch pipeline worth INR 6,000 crore (USD 723 million) and planned fiscal 2026 pre-sales target of INR 12,500 crore (USD 1.5 billion) point to sustained developer confidence in the region’s end-user and investor demand.

Bengaluru remains the anchor for India’s GCC demand, with net absorption led by technology, engineering, and manufacturing occupiers and robust gross leasing in Q3 2025. The city is positioned to deliver a meaningful share of the national office net absorption in 2025, and its residential pipeline includes a record number of premium launches. Pune’s inventory overhang stood near cycle lows, with years-to-sell around 0.7 in late 2024 and likely to hover near that mark into 2026 due to calibrated launches. Kolkata’s office gross leasing crossed 2 million square feet in 2025 for the first time, and rents rose at the fastest pace among eight major markets, while residential demand remained resilient in metro-adjacent suburbs like New Town and Salt Lake. Ahmedabad saw housing demand growth of 21.4% in Q1 2026 and continued to post strong affordability with an EMI-to-income ratio at 18% in 2025, which supports entry-level and mid-income sales. The Rest of India stands to benefit from policy-led infrastructure and manufacturer interest in Tier-2 and Tier-3 cities, as most producers plan operational expansion over the next few years.