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India’s housing market is stronger than ever. Between January and September 2024, over 229,900 units were sold across top seven cities—marking a 17 per cent increase from 2023 and a significant 60 per cent jump from 2019.² The mid- and high-end segments dominate, with premium housing comprising 16 per cent of demand in 2024, up from just 6 per cent in 2019.³Ìý This trend is expected to continue with luxury and ultra-luxury segments growing faster than affordable housing.Ìý

Integrated townships, offering community-focused living and advanced amenities, are also gaining popularity. Consumers are now seeking tech-enabled homes equipped with advanced offerings, such as AI-driven security, automated lighting and sustainable energy solutions. The concept of multigenerational living is also gaining traction, with families opting for spaces designed to accommodate diverse age groups under one roof. Going ahead, with positive lending rates and increasing consumer demand, the housing market is expected to retain the momentum.

Despite global uncertainties, the Indian economy remains resilient, solidifying investor confidence. This optimism is mirrored in India’s office market, with gross leasing hitting a record 53.4 million sq. ft. in January–September 2024.⁴Ìý Key sectors, such as IT, BFSI, engineering and manufacturing are fuelling this growth. India has also positioned itself as a GCC hub, with over 1,700 centres operating nationwide.⁵Ìý In 2024, the GCC market grew by a CAGR of more than 11 per cent, significantly boosting the office market.⁶Ìý While traditional hubs like Bengaluru, Delhi NCR and Mumbai lead leasing activity, tier-2 cities are also emerging as promising markets. Demand is increasingly tilting towards high-tech, sustainable grade-A office spaces equipped with AI-driven workplace management tools, smart building solutions and energy efficient systems.Ìý

Flexible offices spaces and the adoption of ‘Core + Flexâ€� model continue to remain popular. With more employees returning to offices, the demand for office spaces has risen steadily. Consequently, overall vacancy rates have dropped 17 per cent—the lowest recorded in 14 quarters.⁷Ìý ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø India’s CEO Outlook too shows that 78 per cent of Indian CEOs envision a return to an in-office working environment in the next three years. Considering this, commercial real estate is expected see a steady expansion in 2025.Ìý

Increased consumer spending—which reached USD1.29 trillion in 2024—is spurring activity in India’s retail sector.⁸Ìý Leasing activity is soaring and may hit 6.5â€�7 million sq. ft. by the year end, driven by sectors like fashion, food and entertainment.⁹Ìý Today, shopping malls are transforming into experiential hubs, offering much more than shopping. Innovative amenities like family entertainment zones and community spaces are attracting a diverse customer base. The growing consumer desire for experiential retail is expected to emerge as a key trend in 2025.Ìý

Rising domestic tourism and corporate travel have seen positive trends in hospitality. For instance, the branded and organised hotel sector has achieved a decade-high occupancy rate of 67.5 per cent in 2024, signalling strong demand.¹⁰Ìý Overall, the hospitality sector saw investment inflows of USD93 million in the first half of 2024 and is projected to reach USD413 million by the year end, marking a 22 per cent increase from 2023.¹¹Ìý As we move into 2025, rising urbanisation trends, evolving lifestyles and increasing disposable incomes are likely to further drive these sectors.

India’s infrastructure growth continues strongly, powered by a sharp rise in government capex, growing from INR5 lakh crore in 2021â€�2022 to INR11.11 lakh crore in 2024â€�2025.¹²Ìý Focused on roads, railways and aviation, this investment is reshaping the country’s urban and industrial landscape. For instance, the national highway network has expanded by 1.6 times, more than 1,300 railway stations have been modernised and more than 84 airports have been operationalised in the last 10 years, all creating ripple effects across real estate markets.¹³Ìý Tier-2 and tier-3 cities are emerging as hotspots, seeing strong real estate demand driven by improved connectivity. Additionally, the logistics and industrial sector has also grown impressively, with a 25 per cent y-o-y rise in H1 2024.¹⁴Ìý Considering these trends, the demand for satellite townships near major infra hubs is also increasing. Going ahead, with the ongoing capex push, the link between infrastructure development and real estate will only strengthen, creating opportunities across residential, commercial and industrial sectors.

Investments in the sector are expanding beyond traditional models, with alternative asset classes like data centres, co-living spaces and senior housing gaining traction, driven by changing consumer demographics and evolving preferences. For instance, India’s data centre capacity, which is currently at 1,255 MW, is expected to reach 1,600 MW by the year end.¹⁵Ìý In the next two years, the capacity is projected to increase by 66 per cent.¹⁶Ìý Innovative investment avenues and a much improved regulatory environment are also playing a key role in boosting the sector’s transparency and overall institutional appeal. With recent measures, such as the introduction of Small and Medium REITs and the new RERA rules, the momentum is likely to grow. Overall, with record institutional investments flowing into the sector, India’s position as a global hotspot for real estate investment is enhancing. Looking ahead in 2025, we can anticipate more innovative financing avenues flourishing in the Indian market. This diversification, coupled with advancements in technology and sustainability, is expected to attract more inflows into the sector.Ìý

As India embraces innovation, sustainability and urbanisation, 2025 promises to be another transformative year for the Indian real estate, which is growing at a CAGR of over 9 per cent.¹⁷Ìý With a positive economic growth outlook, investor confidence and an ever-evolving consumer base, the sector is poised for a double-digit contribution to India’s GDP and can form a vital pillar for the achievement of Viksit Bharat.

A version of this article was carried by Realty+.