India Real Estate Market H1 2025: Commercial & Residential Sectors Show Strong Fundamentals

India's real estate market has demonstrated remarkable resilience and growth during the first half of 2025, with industry analysts reporting strong fundamentals across both commercial and residential sectors. The performance indicates the sector's robustness amid ongoing global economic uncertainties.

Commercial Real Estate Achieves Resilient Growth Performance

Market reports revealed that India's office sector exhibited significant resilience with gross absorption increasing by 13% year-on-year, reaching 33.7 million square feet in H1 2025. Industry data indicated that Bengaluru led leasing activity across major cities, while flexible workspace solutions expanded substantially, capturing 24% of the total market share.

Technology companies remained the primary demand driver, contributing to a dynamic and future-ready office landscape. The strong performance in office leasing across major Indian cities reflects sustained corporate expansion and workspace evolution trends.

Investment sentiment analysis positioned India as the most resilient commercial real estate market in the Asia-Pacific region, with sustained growth recorded across office, retail, and industrial & logistics sectors. Rising occupier confidence, robust demand from technology and financial services companies, and continued investment by Global Capability Centres (GCCs) strengthened India's market position.

Residential Market Shows Steady Demand Despite Sector Challenges

Property price trend analysis projected that average home prices in India would rise steadily, driven primarily by demand from wealthy individuals. Market forecasts indicated that home prices in major cities are expected to increase by 6.5% in 2025 and 7.5% in 2026, largely supported by strong demand for high-end properties.

However, industry experts noted that the affordable housing sector faces significant challenges due to limited new supply, developer margin pressures, and weak policy support. This situation has left millions dependent on rental accommodations, with urban rental costs forecasted to rise by 5.0% to 9.0% over the coming year, significantly outpacing inflation rates.

The trends align with broader patterns observed in Mumbai's investment hotspots where premium segment demand continues driving market performance.

Policy Support Enhances Market Outlook

The Reserve Bank of India's recent monetary policy decision to reduce the repo rate by 50 basis points to 5.5% is expected to make home loans more affordable, particularly benefiting middle-income and first-time homebuyers. Market analysts anticipate this move will stimulate both residential and commercial property demand.

Additionally, real estate companies welcomed the government's tax relief initiatives aimed at boosting consumption. Measures including income tax cuts and provisions allowing claims for two self-occupied properties as tax-free are expected to enhance disposable income and promote homeownership among potential buyers.

These policy developments complement existing corporate India's green office initiatives that are driving pre-leasing activity in sustainable commercial developments.

Regional Markets Demonstrate Strong Development Activity

Hyderabad emerged as a significant commercial real estate hub, with relaxed floor space index norms and increased real estate investments leading to high-rise project development. The city now boasts the second-highest number of skyscrapers in India, reflecting rapid development and evolution into one of the country's biggest economic hubs.

Pune established itself as a strategic investment destination, particularly in areas like Kharadi NX, which offers strong infrastructure, robust tenant base, and high-grade development activity. The city's commercial real estate market is characterized by targeted investments in established corridors with infrastructure depth and high occupier density.

These regional developments reflect broader trends in tier-2 and tier-3 markets reshaping India's real estate landscape as companies seek expansion opportunities beyond metro cities.

Market Outlook and Investment Opportunities

Industry analysis suggests that India's real estate market in H1 2025 demonstrates strong fundamentals across both commercial and residential sectors. While challenges persist in the affordable housing segment, supportive policies and sustained demand in premium segments indicate a positive outlook for the remainder of the year.

Market experts advised investors and stakeholders to remain informed and strategically engaged to capitalize on emerging opportunities. The combination of policy support, technological sector demand, and regional market development creates multiple avenues for real estate investment and growth.

For those considering real estate investment opportunities in Delhi-NCR, the current market fundamentals suggest favorable conditions for strategic property acquisitions.

Disclaimer: This news article is based on publicly available market reports and industry analysis. While every effort has been made to ensure accuracy, readers are advised to verify details independently and consult with qualified real estate professionals before making any investment decisions. The information provided is for general awareness purposes only and should not be considered as investment advice.