Stakeholder sentiment in India’s real estate sector stabilised in the final quarter of 2025, with both current and future outlooks remaining firmly in the optimistic zone, according to the Knight Frank–NAREDCO Real Estate Sentiment Index Q4 2025. The Current Sentiment Score edged up to 60 from 59 in the previous quarter, while the Future Sentiment Score held steady at 61, signalling balanced expectations for the near term after moderation earlier in the year. The steady readings reflect improving macroeconomic visibility, easing inflation, and supportive funding conditions, even as global uncertainties persist.

In Q4 2025, current and future sentiment scores stabilized at 60 and 61, reflecting continued optimism. Despite remaining below 2023–24 peaks, resilient office demand, improving liquidity, and stable domestic economic conditions support positive expectations amid global uncertainties.

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said, “The Q4 2025 Sentiment Index reflects a market that has found its balance after a period of moderation. Real GDP growth of 8.2% in Q2 FY 2025–26, compared with 5.6% in the same period last year, has reinforced confidence among stakeholders. High-frequency indicators continue to point to sustained economic momentum, helping offset global uncertainty and supporting real estate fundamentals. Confidence is supported by stronger macro visibility, steady funding conditions, and disciplined decision-making across stakeholders. Residential markets are benefiting from higher ticket size segment demand and calibrated supply, while the office sector continues to stand out on the back of robust leasing activity and firm rentals. Together, these factors point to a sector progressing on stable fundamentals.”

Funding availability sentiment also improved during the quarter. Most stakeholders expect liquidity conditions to remain stable or improve, supported by policy continuity and a focus on quality assets. While lenders and investors continue to take a selective approach, capital access remains supportive across asset classes.

Sentiment around economic momentum improved in Q4 2025, with a majority of respondents expecting stability or improvement in the period ahead. Easing inflation, accommodative monetary conditions, and continued public capital expenditure have strengthened visibility on growth.

Zonal future sentiment improved modestly across all regions, with every zone remaining in the optimistic zone during Q4 2025. The South Zone retained its leadership position with a score of 62, supported by strong office leasing activity in Bengaluru and Hyderabad and resilient demand in higher ticket residential segments. The East Zone also improved to 62, driven by steady mid-segment housing demand. The West Zone strengthened to 62, aided by stable commercial market activity and a calibrated approach to residential development. The North Zone recovered to 59 in Q4 2025, reflecting stabilising sentiment after softness in earlier quarters, supported by steady office traction and ongoing infrastructure momentum.

The improvement across regions points to broad-based confidence anchored in urban demand and improving macro conditions.

Stakeholder sentiment diverged moderately during Q4 2025. Institutional stakeholders, including banks, financial institutions, and private equity funds, recorded a Future Sentiment Score of 63, reflecting rising confidence in asset quality and liquidity conditions.

Developers, meanwhile, maintained a disciplined stance, with a future sentiment score of 58. The gap highlights a market environment where capital providers remain supportive, while developers continue to align growth plans with demand visibility and funding prudence.

Residential Market Outlook

Residential future sentiment showed improvement in Q4 2025, supported by sustained demand in the higher ticket size segments and disciplined supply strategies. Developers continue to calibrate new launches closely with demand conditions and focus on inventory management. While sales momentum has moderated from earlier peaks, steady demand in the higher ticket size segments and improving financing conditions have reinforced confidence across residential markets. Overall sentiment stays in the optimistic zone, marked by stable demand and controlled supply additions.

Office Market Outlook

The office segment continues to anchor overall market confidence, with sentiment remaining firmly positive in Q4 2025. Leasing expectations remain strong, underpinned by sustained occupier demand, particularly from Global Capability Centres, across major cities.

Limited availability of quality Grade A space has encouraged early commitments and pre-leasing activity, reflecting forward-looking space requirements from occupiers. The supply-demand imbalance continues to support firm rental expectations, with a majority of stakeholders anticipating rents to remain stable or improve.

Sentiment around new office supply has also improved, pointing to expectations of a stronger development pipeline ahead, even as current availability remains constrained.

Parveen Jain, President, NAREDCO, said, “The Q4 2025 Knight Frank–NAREDCO Real Estate Sentiment Index shows that confidence has strengthened after a phase of mild moderation. The improvement in current sentiment and the continued optimism in future sentiment suggest a market moving forward in a balanced manner. Residential markets are showing clearer signs of stability, supported by steady end-user demand and a disciplined approach to new supply. The office segment remains positive, backed by consistent leasing activity and corporate expansion. Improving macroeconomic visibility, easing inflation, and policy continuity have further reinforced broad-based confidence across regions.”

The Knight Frank – NAREDCO Real Estate Sentiment Index Q4 2025 report findings indicate that India’s real estate sector is entering 2026 on a steadier footing, supported by improving economic clarity, prudent capital deployment, and demand-driven strategies across asset classes.