Is India’s Real Estate Sector Ready for Sustainable Growth in 2026?
Synopsis
Key Takeaways
- India's real estate sector is poised for measured growth in 2026.
- Strong GDP growth of 8.2% in Q2 FY26 supports this outlook.
- The office market is expected to experience significant absorption rates.
- Tier-II and Tier-III cities will gain importance in real estate demand.
- Government reforms and lower interest rates will bolster investor sentiment.
New Delhi, Jan 2 (NationPress) As India stepped into 2026, the real estate industry is on track for measured and sustainable growth across all primary segments, according to industry experts. They emphasized that strong fundamentals, the rise of premium housing, and adaptable retail and logistics frameworks will continue to lure both domestic and international investments.
Despite the macroeconomic and geopolitical challenges faced in 2025, 2026 is anticipated to be a year of recalibration and renewed economic momentum.
“This optimistic outlook is bolstered by India’s impressive GDP growth of 8.2 percent in Q2 FY26, achieved even amidst global uncertainties and shifting trade dynamics. With this robust growth rate, the nation is firmly on the path to becoming the world’s third-largest economy by 2030, aiming for a GDP of $7.3 trillion,” stated Shrinivas Rao, FRICS, CEO of Vestian.
To support economic progress, the government has enacted a comprehensive range of fiscal and monetary measures. Fiscal strategies included streamlining GST rates and adjusting income tax brackets.
From a monetary perspective, the RBI has lowered the repo rate to 5.25 percent while adopting a neutral stance, a decision anticipated to enhance economic activities in 2026.
Overall, the year is set to showcase holistic sectoral growth, increased real estate activities, and improved investor confidence, according to Rao.
The office market is expected to continue its growth in 2026, with gross absorption projected to reach 75–80 million square feet, primarily driven by ongoing expansions from Global Capability Centres (GCCs).
Key sectors such as IT-ITeS and BFSI are likely to remain significant contributors, and flexible workspace operators are expected to solidify their presence as businesses prioritize agility and hybrid work models. Leasing activity is predicted to be led by Bengaluru, Chennai, and Hyderabad, with Mumbai and Pune anticipated to capture an increased share, according to Rao.
Prashant Sharma, President of NAREDCO Maharashtra, remarked that 2025 was a pivotal year for India’s real estate sector, characterized by significant policy reforms, strong demand across various asset classes, and a renewed emphasis on sustainable urbanization.
“Tier-II and Tier-III cities are poised to play a more prominent role in India’s real estate expansion narrative in 2026. Enhanced connectivity, growing employment opportunities, and emerging industrial corridors will redirect demand beyond metropolitan areas,” he added.
According to Aniket Dani, Director of Crisil Intelligence, the outlook for fiscal 2027 is increasingly positive, with demand recovery driven by rising incomes, lower interest rates, and ongoing infrastructure advancements.
In contrast, the commercial real estate segment is predicted to maintain its growth trajectory this fiscal year, with demand expected to rise by 5-7 percent and supply by 9-11 percent, supported by robust leasing from global capability centres, flexible workspace operators, and the IT/ITeS and BFSI sectors, Dani noted.