India's Real Estate Market Demonstrates Resilience Through Global Economic Volatility: Knight Frank-Naredco Assessment Reveals Strong Fundamentals

A collaborative assessment by Knight Frank India and Naredco has revealed that India's real estate sector continues to demonstrate exceptional stability and resilience amid ongoing global economic uncertainties. The sector's strength is reportedly being driven by robust buyer sentiment, sustained leasing activity, disciplined supply management, and stable financial conditions.

According to the report released from Mumbai on November 20, both the premium residential and office segments are witnessing sustained momentum. The industry's performance has been supported by favorable interest rate conditions, moderating inflation levels, and a strategic approach to project launches by developers across major markets.

Market Sentiment Indicators Show Upward Trajectory

The assessment highlighted significant improvements in market sentiment metrics for the third quarter of 2025. The Current Sentiment Score reportedly rose to 59 from the previous quarter's 56, marking the highest reading recorded so far in 2025. Meanwhile, the Future Sentiment Score maintained its position at 61, indicating continued optimism among industry stakeholders about the evolution of Indian real estate market prospects.

Regional Performance Analysis Reveals Varied Growth Patterns

South India has emerged as a particularly strong performer in the latest quarter, with the region benefiting from high-end housing demand and robust office space activity in Bengaluru and Hyderabad. The Hyderabad real estate market has reportedly shown particular strength in the premium housing segment.

North India's outlook has reportedly improved, driven primarily by steady leasing activity in the Delhi-NCR market. The region has witnessed consistent demand for investment properties in Delhi-NCR, contributing to the overall positive sentiment.

East India experienced some moderation during the quarter, attributed to reduced residential project launches in the region. Meanwhile, West India saw a slight slowdown in housing activity, though this was reportedly offset by stable office absorption in Mumbai and Pune. The commercial real estate sector in Mumbai continues to demonstrate resilience.

Residential Market Outlook Shows Strong Price Stability

The residential sector outlook remains positive, with 92% of stakeholders expecting prices to either remain stable or increase in the coming quarters. Price appreciation has been particularly notable in several key markets, with NCR, Bengaluru, and Hyderabad recording year-on-year gains ranging from 13% to 19% during the third quarter.

Sales forecast data suggests growing confidence in the residential segment, with 74% of respondents expecting sales to remain stable or improve, up significantly from 52% in the second quarter. This represents a substantial shift in market sentiment toward resilient home sales across India.

Premium Segment Leads Residential Performance

The report indicates that the premium housing segment continues to outperform lower-income housing categories amid elevated input costs and developer caution. Launch pipeline expectations remain optimistic, with 71% of respondents anticipating that new project launches will either hold steady or increase. The luxury housing market in India has shown particular strength, with ultra-luxury real estate attracting significant investment from high-net-worth individuals.

Commercial Office Sector Demonstrates Strongest Sentiment

The office market segment reportedly showed the strongest sentiment indicators across all real estate categories. Approximately 78% of respondents expect new office supply to remain steady or grow in the coming quarters, while an overwhelming 95% anticipate office rents to remain stable or increase. This optimism is driven by low Grade A availability and strong pre-lease activity across major markets.

Structural market depth remains particularly strong in technology hubs including Bengaluru, Hyderabad, and Delhi-NCR, where sustained leasing pipelines continue to support the India office market boom. The office real estate sector continues to benefit from technology and services expansion.

Industry Leaders Express Confidence in Market Fundamentals

Parveen Jain, President of Naredco, stated that all indicators point toward a balanced and resilient outlook for the sector. He noted that developers and investors are reportedly encouraged by policy continuity, stable demand conditions, and healthy funding availability in the market.

Allwyn Borde, Senior Sales Manager at Realspace India, echoed these sentiments, emphasizing that the sustained optimism reflects the sector's adaptability. He highlighted that developers have adopted strategic approaches, avoiding over-supply in slower segments while focusing resources on premium and high-demand market pockets. This strategic approach has helped developers optimize their real estate investment returns.

Comprehensive Market Metrics Indicate Positive Trajectory

The assessment compiled several key metrics that collectively paint a picture of market strength. The Current Sentiment Index improved to 59 in Q3 2025 from 56 in Q2, while the Future Sentiment Index remained unchanged at 61. Sales expectations showed 74% of stakeholders forecasting steady or improved performance, and price movement indicators revealed that 92% foresee stable or rising prices across markets.

New residential launch activity is expected to remain robust, with 71% of respondents anticipating stable or increased launch volumes. On the commercial side, office supply expectations stand at 78% for stable or increasing supply, while the office rent outlook shows 95% of stakeholders anticipating rent stability or increases in the coming quarters.

Strategic Market Recalibration Supports Long-Term Growth

The report emphasized that the sector has successfully adapted to macroeconomic pressures through strategic recalibration. Developers have reportedly focused on maintaining disciplined supply in high-demand segments, ensuring sustainable growth rather than pursuing volume at the expense of quality and market balance.

Institutional investors, including banks and private equity firms, continue to demonstrate strong confidence in the sector, backed by adequate liquidity and improving asset quality. The banking sector's participation in real estate financing has provided crucial support to market stability.

Market Positioned for Continued Growth Despite Global Headwinds

With rising demand in the premium residential segment, a resilient office sector, and optimism across key metropolitan markets, India's real estate sector appears well-positioned for continued growth. The combination of stable interest rates and easing inflation creates favorable conditions for both developers and buyers in the near term.

The assessment suggests that the sector's strong fundamentals, combined with strategic market management and robust institutional support, position it to weather global economic uncertainties while maintaining growth momentum. The focus on strategic investment locations and premium segments has helped developers navigate challenging market conditions effectively.

Disclaimer: This article is for informational purposes only and should not be considered as financial or investment advice. Readers are advised to conduct their own research and consult with qualified professionals before making any real estate investment decisions. Market conditions, prices, and policies are subject to change. The information presented is based on the Knight Frank-Naredco report and industry sources available at the time of publication.