India’s real estate outlook strengthened in Q3 2025, supported by robust office leasing, resilient high-end residential demand, and favourable macroeconomic conditions such as stable interest rates, easing inflation, and improved liquidity, a report said on November 15. According to the Knight Frank-NAREDCO Real Estate Sentiment Index, the Current Sentiment Score rose to 59 from 56, while the Future Sentiment Score remained steady at 61
Real estate developers and financial institutions remain optimistic about the sector’s growth prospects. Demand in the premium residential segment continues to be strong, while the office market shows structural depth supported by robust leasing pipelines, the report said.
The Current Sentiment Score rose to 59 in Q3 2025 from 56 in the previous quarter, indicating improving confidence among stakeholders, while the Future Sentiment Score remained stable at 61, maintaining its position in the optimistic zone. Improved consumption, all of which continue to underpin growth. The Current Sentiment Score of 59 marks the highest level recorded in 2025 so far, reflecting a broad-based improvement across both developer and non-developer communities, the 46th edition of the Knight Frank-NAREDCO Real Estate Sentiment Index Q3 2025 (July-September) showed.
South Indian cities remained the most buoyant on the back of strong office leasing momentum
Zonal sentiment trends in Q3 2025 suggest stability across most regions, with optimism prevailing nationwide. The South Zone remained the most buoyant at 62, even though the score moderated by one point. Driven by strong leasing momentum in Bengaluru and Hyderabad alongside demand for high ticket size housing segments.
The North Zone maintained its recovery, inching up to 56 on the back of steady office activity in NCR. The East Zone eased slightly to 59, reflecting moderate residential launches in the first 3 quarters of 2025 compared to the same period in 2024, while the West Zone dipped marginally from 61 to 59, as robust office absorption in Mumbai and Pune offset a measured momentum in the residential sector.
What does the Sentiment Index reflect?
The index reflects strengthening market fundamentals driven by robust office leasing activity, resilient residential demand especially in high -ticket segments, and supportive macroeconomic conditions. Liquidity has remained healthy, inflation has eased, and policy consistency has reinforced confidence among developers and investors alike.Improved confidence stems from stable interest rates, benign inflation, and healthy domestic, it noted
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “The sustained optimism reflected in the Q3 Sentiment Index underscores the sector’s resilience and adaptability. Both current and future sentiment scores remain comfortably in the positive zone, reaffirming confidence in India’s economic stability and long-term growth story. Demand in the premium residential segment remains healthy, while the office market continues to demonstrate structural depth with strong leasing pipelines. Stable interest rates, easing inflation, and improved liquidity have reinforced overall sentiment. As we approach 2026, we expect the market to maintain steady momentum across asset classes.”
Developers tread cautiously; non-developers maintain steady optimism
Developers’ sentiment eased slightly to 59 from 63, reflecting cautious optimism amid elevated input costs and slower traction in the mid to low segment housing categories. Non-developers, including banks, financial institutions, and private equity funds, maintained a steady stream of optimism for Future Sentiment to a score of 61.
New residential launches to remain stable as developers focus on luxury housing
Residential sentiment continued to strengthen in Q3 2025, reflecting cautious demand and strategic supply management. About 71% of respondents expect new launches to remain stable or increase, up from 70% in Q2 2025, as developers focus on higher-ticket projects while moderating activity in lower ticket size segments to prevent oversupply.
Optimism around residential sales have also grown where 74% respondents expect sales to either remain stable or improve, compared to 52% in Q2 2025 with similar opinion. This optimism is supported by rate cuts, subvention schemes, and other buyer-focused incentives enhancing affordability. Meanwhile, 92% of respondents anticipate prices to remain stable or rise, indicating sustained confidence.
Markets such as NCR, Bengaluru, and Hyderabad continue to drive this price momentum, posting Y-o-Y increases of 13%-19% in Q3 2025 compared to the same period last year, underscoring strong demand in the high and upper-mid ticket size housing segments.