Real estate is one of the fastest-growing sectors in the Indian economy. In 2023, the sector witnessed a frolic growth due to the surging demand in both commercial and residential properties. The current market size of the real estate sector in India stands at USD 0.33 trillion, which is expected to reach USD 1.04 trillion by the year 2029 with a CAGR of 25.60%.
According to a report from CREDAI-Colliers-Liases Foras Housing, average home prices have increased by 10% in the first quarter of 2024 as compared to the same period last year. The overall residential property prices have increased significantly in all prominent cities of India, with Bengaluru emerging on the top. This surge in housing prices indicates a growth in the market driven by strong demand. This demand is further fortified by the emergence of several micro-markets with better infrastructure, leading to a tighter supply-demand setting.
As far as 2025 is concerned, the industry outlook seems positive due to various affirmative indicators, such as an impressive recovery from the existing stock market downfall, creation of new job opportunities, and overall growth. All these factors would work together to fuel an increase in the demand for housing across the country.
Top Indian housing trends in 2025
Now, let’s take a look at some of the top Indian housing trends that will shape the property market in 2025.
Digital Property Search
Though the presence of digital real estate platforms is nothing new, they have become more valuable during and after the pandemic. Various studies show that the people today prefer to search for a property on a digital platform. Several other factors related to home-buying such as virtual property tour, rent amount, brokerage amount, lease agreement, etc., have become digital too. Moreover, availing of a home loan has become extremely simpler and quicker with online applicant submission and processing. Real estate players have understood the importance of going digital and already started focusing on this side.
Shop-cum-offices (SCO)
After the pandemic, the concept of SCO has taken big strides. Moreover, the increasing acceptance of hybrid work models further pushed companies to adopt SCO spaces. A shop-cum-office is a freehold commercial property where owners own total land space and they can use it to build offices, shops, or both. This new type of commercial space is a perfect union of retail and office space made to cater to businesses getting an office space and a shop. These hybrid spaces feature recreational zones, providing both convenience and versatility.it
Tier-II and Tier-III Cities
The government’s increased focus on tier-II and tier-III cities has changed the landscape of the property market in 2024. Today, investors are moving to these cities for investment to get better returns. Various government programs such as Smart Cities Mission and AMRUT have made these cities full of opportunities. This has further fuelled an increase in employment opportunities and monetary growth. You might have seen many MNCs setting up their offices in Tier II and Tier-III cities like Jaipur, Lucknow, Bhopal, Pune, and others.
Changing Buyers’ Profile
The Indian real estate sector is getting deeply impacted by changing buyer profiles. Things like increasing per capita income, stable interest rates, and reinforcing industry regulations are driving today’s buyers into the real estate sector, especially millennials who prefer proper ownership over renting. The biggest demographic section includes technology professionals who prefer easy investment processes, affordable housing, feature-rich projects, and improved information accessibility. The industry is anticipated to draw in more investors as a result of SEBI’s recent changes to establish a regulatory framework for Small and Medium REITS (SM REITS). Additionally, asset tokenization is becoming more popular, which facilitates fractional ownership. Since the average age of first-time investors is now 25, it is anticipated that the next generation will influence RE products
Commercial Sector Growth
Over the past few years, the commercial real estate sector has witnessed phenomenal growth and emerged as the most favorable investment choice. This growth is majorly fuelled by tech-driven sectors including IT and ITeS. Heightened consumer spending and supply chain diversification are further meant to strengthen the commercial real estate sector in the coming years. The increase in foreign direct investment (FDI) is further expected to trigger the growth of the commercial real estate segment.
Affordable Housing
Affordable housing is another emerging trends in Indian real estate sector. However, it is necessary to note that it has complex dynamics due to the need to balance demand and supply. Various schemes like “Housing for All” have resulted in better access to housing. However, there are still some challenges prevailing in the market such as insufficient finance and intricate legal formalities. One important thing to note is that technology has been playing a big role in making affordable housing loaded with luxury. Things like home automated systems, and AI integration have been redefining the way dwellers connect with their homes.
Luxury Housing
Due to the rising Indian economy and enhanced purchasing capacity of today’s millennials, luxury housing has taken center stage among all India real estate trends. This type of housing is immensely popular among buyers who look forward to an unparalleled living experience. A research study done by India Sotheby’s International Realty reveals that there has been a considerable increase in wealthy people who are ready to invest in luxury properties in the next few years. Over the past few years, the dynamics of luxury real estate has underwent considerable changes, due to changing buyer preferences driven by changing demographics, heavy technology exposure, and increasing income levels.
Sellers’ Market
Experts expect housing market of 2025 to be a sellers’ market. This is due to a speculation that property rates would go up due to the limited supply. Also, the new generation would take its first step in the real estate sector for investment. Moreover, the industry is expected to see a surge in the demand for both residential and commercial spaces. At the outset, it can be derived that the real estate sector would see an increase in demand and limited supply.
Slower Rental Market
It has been observed that people are more likely to buy a home rather than stay on rent, particularly after the pandemic. One big reason for this shift is increasing house rents and people find it better to pay the same amount as EMI rather than paying rent. The increased purchasing capacity of people has pushed this sift to a large extent. Overall, this has strengthened the real estate sector as the demand for quality housing has gone up in recent times.
Good Times Ahead For Property Market in 2025
India’s commercial real estate sector has been openly embracing novel strategies to level up absorption rates, constantly moving towards enhancement and expansion. In regard to 2025, domain experts expect a sustained increase in demand for commercial real estate and a burgeoning office market highlighted by growth and innovation.
Next year, we expect to witness a fortified office market built on solid fundamentals, resonating constancy, and pliability. The buyer’s requirements are supposed to grow, encouraging real estate agents to act accordingly. In addition, the burgeoning Indian economy and strengthening domestic sector are expected to instil more confidence in buyers towards property purchase and investment.
It can be further derived that supply and demand balance would maintain manageable vacancy levels, lending opportunity for rental advantage. With growing capital investments, surging manufacturing production, and feasible government regulations, the industrial and warehousing sector is predicted to witness resilient economic thrust. Numerous next-gen technologies such as Artificial Intelligence (AI) and the Internet of Things (IoT) are envisaged to promote the expansion of smart and automated warehouses, reshaping the landscape of the industrial and warehousing sector.
India’s need for office space and commercial real estate is expected to steadily grow in 2025. The market is expected to exhibit stable growth and development in the upcoming year, with a strong emphasis on innovation, expansion, and next-level buyer experiences. The dynamic commercial real estate sector of 2024 awards opportunities that buyers, investors, and developers can all profit from.
The Conclusion
The overall real estate sector for 2025 seems positive due to evolving buyer preferences and changing dynamics. It is necessary for stakeholders to openly embrace sustainability, innovation, and digitization to make their stance strong amidst high competition. From a buyer’s or investor’s perspective, 2025 is supposed to be full of opportunities that would be worth considering. However, it is necessary to keep a constant check on the emerging Indian real estate trends to embrace profitable opportunities and avoid risky endeavors.
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