India’s real estate sector witnessed a phase of cautious recovery in Q2 2025, according to the Knight Frank-NAREDCO Real Estate Sentiment Index. Despite ongoing global uncertainties, developers and financial institutions remain optimistic about the future of India’s property market over the next six months. Notably, the ₹1 crore-plus housing segment outperformed other price categories, largely driven by demand in select high-potential micro-markets. This shift reflects evolving lifestyle preferences and urban expansion patterns, which developers are adapting to through tailored project launches.
The Sentiment Index revealed improving confidence. The Current Sentiment Score rose slightly from 54 to 56 in Q2 2025, ending a four-quarter downward trend. Meanwhile, the Future Sentiment Score increased to 61 from 56, suggesting positive expectations. A score above 50 indicates optimism. Geographically, South India led the recovery, with a Future Sentiment Score of 63. Cities like Bengaluru, Hyderabad, and Chennai stood out due to active developer participation, increased office absorption, and robust demand in both plotted and apartment segments.
The report highlights sustained optimism in the premium housing sector, supported by easing interest rates, strong demand, and robust GST collections. The ₹1 crore-plus category saw continued traction, while mid- and low-income segments faced affordability challenges. About 70% of stakeholders expect residential launches to remain stable or increase in the coming quarters. In cities such as Bengaluru, NCR, and Chennai, double-digit year-on-year price growth was observed due to limited new supply and demand for branded, amenity-rich homes.
Additionally, 52% of stakeholders foresee stable or improved residential sales in the next six months, compared to 50% in the previous quarter. Developer confidence surged significantly, with their Future Sentiment Score jumping from 53 in Q1 to 63 in Q2 2025. This uptick is largely attributed to improved financing conditions, RBI’s 100-basis-point repo rate cut in H1 2025, and growing high-ticket residential demand.
Non-developer stakeholders, including banks, NBFCs, and private equity firms, also reflected growing confidence, with their sentiment score improving from 57 to 60. In terms of regional performance, North India rebounded from a low of 48 to 55, supported by infrastructure improvements and rising demand in Delhi-NCR. The West zone also showed an uptick, rising from 58 to 61, while the East zone remained stable at 61, led by mid-market consistency in Kolkata. Overall, the real estate sector is gradually regaining momentum with a premium housing-led recovery.
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