India real estate optimism holds; developers trail funds, index shows

Half expect funding to improve in 6 months, whilst 8% see a decline, Knight Frank–NAREDCO said.

Sentiment in India’s real estate sector remained in optimistic territory in the fourth quarter of 2025, supported by improving macro visibility and steadier funding conditions, according to the Knight Frank–NAREDCO Real Estate Sentiment Index.

The Current Sentiment Score rose to 60 in Q4 2025 from 59 in the previous quarter, whilst the Future Sentiment Score held steady at 61, signalling continued optimism over the next six months.

Knight Frank and NAREDCO said easing inflation, policy continuity, and clearer economic signals helped stabilise sentiment, even as lenders and investors remained selective.

Funding sentiment strengthened in the quarter. About 50% of respondents expect funding availability to increase over the next six months, whilst only 8% anticipate a decline. Views on economic momentum also improved, with 52% of stakeholders expecting conditions to strengthen.

Optimism was broad-based across regions. Future sentiment scores improved modestly in all zones, with the South, East, and West leading at 62, whilst the North recovered to 59.

The office sector continued to anchor overall confidence. The report said office market sentiment remained firmly positive, driven by leasing demand– particularly from Global Capability Centres– and limited availability of Grade A space, which has encouraged early commitments and pre-leasing.

For the next six months, 58% of respondents expect leasing activity to increase, and 49% expect office rents to rise, whilst only 6% foresee a decline.

Residential sentiment was more mixed but remained supportive. For the coming six months, 40% of respondents expect sales to increase, whilst 29% see sales holding steady and 31% expect a decline.

Launch expectations were stronger, with half of the respondents anticipating an increase, and price expectations were evenly split between growth and stability, with only 8% expecting prices to fall.

The index also showed a divergence between stakeholder groups. Non-developers, including banks, financial institutions, and private equity funds, reported a higher future sentiment score of 63, compared with 58 for developers, indicating stronger confidence among capital providers.

The quarterly index is based on a survey of supply-side stakeholders and measures sentiment across factors such as economic momentum, funding, launches, sales, leasing, prices, and rents, with scores above 50 indicating optimism.