Real estate sentiment in India remained steady and optimistic during the fourth quarter of 2025, supported by improved office leasing activity and stable liquidity conditions, according to the latest Knight Frank–NAREDCO Real Estate Sentiment Index. The report indicates that industry stakeholders continue to maintain a positive outlook despite a cautious macroeconomic environment.
The current sentiment score for Q4 2025 stood at 60, marginally higher than the previous quarter, while the future sentiment score remained unchanged at 61. Both indicators stayed within the optimistic range, reflecting confidence in market stability over the near term. Improved economic clarity, easing inflationary pressures and controlled interest rate conditions contributed to the stable sentiment outlook.
Liquidity conditions showed signs of improvement during the quarter, with a majority of respondents expecting capital availability to remain stable or improve over the next six months. While lenders and investors continued to follow a selective approach, funding access remained supportive across residential, commercial and alternative real estate segments. Institutional investors and financial stakeholders reported higher confidence levels compared to developers, indicating a relatively stronger comfort with capital deployment and risk management.
Office leasing emerged as a key driver of sentiment during the quarter. Demand for quality Grade A office spaces remained resilient, particularly in major business markets such as Bengaluru and Hyderabad. Strong leasing activity in these cities reinforced confidence in the commercial real estate segment and supported overall market momentum. Regional sentiment improved modestly across zones, with the southern and western regions leading the index, while the northern region showed signs of recovery after earlier softness.
In the residential segment, demand for higher-value homes continued to support market stability. Controlled supply additions and steady end-user interest helped maintain balanced conditions across key urban markets. Developers remained cautious in their outlook, focusing on demand-driven launches and disciplined project execution.
The report noted that India’s real estate sector is entering 2026 on a stable footing, backed by sustained occupier demand, prudent capital allocation and improving economic clarity. The combination of steady office leasing, supportive liquidity conditions and measured growth strategies is expected to help maintain market confidence in the coming quarters.
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