The Indian real estate sector expects moderate but sustainable growth in 2026

As India enters 2026, the real estate sector is positioned for measured but sustainable growth across all key segments, industry experts said on Friday. They added that strong fundamentals, the expansion of premium residential properties and adaptive retail and logistics ecosystems will continue to attract both domestic and international capital.While 2025 brought several macroeconomic and geopolitical challenges, 2026 is expected to be a year of recalibration and renewed economic momentum.

“This outlook is supported by India’s strong GDP growth of 8.2 percent in the second quarter of FY26, which was recorded despite global uncertainties and changing trade dynamics. With this strong growth rate, the country remains firmly on track to become the world’s third-largest economy by 2030, with an estimated GDP of $7.3 trillion,” said Shrinivas Rao, FRICS, CEO of Vestian.To strengthen economic development, the government has introduced a robust mix of fiscal and monetary measures. The fiscal steps included rationalization of GST rates and revisions in income tax rates.

On the monetary front, the RBI cut the repo rate to 5.25 percent and maintained a neutral stance, a move that is expected to boost economic activity in 2026.

Overall, the year is poised for holistic sector growth, strengthened real estate activity and improved investor sentiment, Rao said.

The office market is expected to continue its upward trend in 2026. According to Vestian Research, gross absorption is expected to reach 75 to 80 million square meters, largely driven by continued expansion from Global Capability Centers (GCCs). The IT-ITeS and BFSI sectors will also continue to make significant contributions. Flex space operators are expected to further consolidate their presence as occupiers prioritize flexibility and hybrid workplace models. The leasing business will be led by Bengaluru, Chennai and Hyderabad, with Mumbai and Pune expected to record a larger share, Rao said.

According to Prashant Sharma, President, NAREDCO Maharashtra, the year 2025 has been a landmark year for the Indian real estate sector, marked by significant policy reforms, robust demand across asset classes and a renewed focus on sustainable urbanization.

“Tier-II and Tier-III cities will play a bigger role in India’s real estate growth story by 2026. Improved connectivity, rising employment opportunities and emerging industrial corridors will shift demand beyond the metros,” he said.

According to Aniket Dani, Director, Crisil Intelligence, the outlook for the 2027 fiscal year is more optimistic, with demand recovery driven by rising incomes, lower interest rates and continued infrastructure improvements.

In contrast, commercial real estate is expected to continue its growth trajectory this fiscal – with demand increasing by 5 to 7 percent and supply by 9 to 11 percent – fueled by strong leasing from global capacity centres, flexible workspace operators and the IT/ITeS and BFSI sectors, Dani noted.