The Future of Indian Real Estate: Key Real Estate Market Trends Shaping 2025

India’s real estate market remains a vital pillar of the nation’s economy, driving significant growth and development. In 2024, the sector has already experienced notable shifts driven by changing consumer preferences, evolving government policies, technological advancements, and global economic factors, with more changes expected in the latter half of the year. This period has proven to be transformative, marked by the resurgence of critical segments, accelerated technology adoption, and the persistence of post-pandemic trends.

Below is a detailed look at the seven key real estate trends shaping India in 2024:

1. Residential Real Estate Demand Shift

According to the housing market analysis, a key trend in Indian real estate in 2024 is the changing demand for residential properties. As urbanisation accelerates, there is a growing preference for affordable housing in suburban areas and tier-2 and tier-3 cities. Homebuyers are increasingly moving away from the central hubs of major metropolitan areas like Mumbai, Delhi, and Bengaluru, opting for nearby locations that offer larger living spaces at more affordable prices.

2. Commercial Real Estate: Focus on Flexibility and Technology

In 2024, India's commercial real estate sector is experiencing a revival, particularly in tech-centric cities like Bengaluru, Hyderabad, and Pune. However, the segment is evolving as businesses shift from traditional office setups to more flexible workspaces. The rise of hybrid work models has increased the demand for flexible office solutions, such as coworking spaces, as companies look to reduce costs and enhance operational agility.

3. Growth in Co-living and Rental Housing

The rental housing market is set for significant growth in 2024, especially among young professionals, students, and millennial renters. Co-living spaces are gaining popularity in key cities like Bengaluru, Pune, and Hyderabad, driven by affordability and an increasing preference for community-oriented living arrangements.

4. Sustainable and Green Buildings on the Rise

Sustainability continues to be a central focus in India's real estate sector in 2024, with rising demand for green, energy-efficient buildings. Builders and developers are increasingly prioritising eco-friendly construction methods, sustainable materials, and energy-saving designs to meet the needs of an environmentally conscious clientele.

5. Luxury Real Estate: A Niche Segment Thriving

Although affordability remains a crucial concern for many, India's luxury real estate market is thriving. High-net-worth individuals (HNWIs) and Non-Resident Indians (NRIs) are driving the demand for high-end properties in major cities like Mumbai, Delhi, and Bengaluru, seeking premium homes with advanced amenities and prime locations.

6. Real Estate Investment Trusts (REITs): A Growing Investment Avenue

Since their introduction in 2019, Real Estate Investment Trusts (REITs) have gained increasing popularity in India. In 2024, this trend is expected to grow further as more investors look for diversified and regulated investment opportunities within the real estate sector.

7. The Role of Technology: PropTech is Revolutionising Real Estate

Technology remains a transformative force in the real estate market, with PropTech (property technology) seeing broader adoption in 2024. Innovations such as virtual property tours and AI-driven analytics are empowering both buyers and developers to make more informed decisions.

Key Real Estate Market Trends in India for 2025

India's real estate market is projected to grow at a compound annual growth rate (CAGR) of 9.2% from 2023 to 2028. The market's future looks promising, with ongoing growth and evolution expected in the coming years. As India enters 2025, the real estate sector is set to experience notable transformations influenced by changing consumer preferences, technological innovations, and socio-economic dynamics.

Given the real estate forecast for the next five years, now is an opportune time to invest in the market. The market presents promising investment prospects with a positive outlook, opportunities for capital gains, supportive policies, and potential for long-term value appreciation.

Why Will Real Estate Be a Strong Investment in 2025?

• Continued Urbanisation and Growth
• Economic Expansion
• Infrastructure Development
• Inflation Hedge
• Supportive Government Policies
• Technological Advancements
• Long-Term Investment Stability
• Growing Demand for Sustainable Living

Here are the key trends anticipated to transform the Indian real estate market in 2025:

Urban Redevelopment and Infrastructure Development

Urban redevelopment and infrastructure improvements are set to fuel growth in the real estate sector. Investments in transportation, smart city projects, and urban renewal efforts will boost property values and encourage development in strategically targeted areas.

Drivers:

• Government-led initiatives for infrastructure and urban renewal
• Rising property values in well-connected and upgraded areas
• Emphasis on innovative city development and modernisation

Expansion of Rental Markets

The co-living and rental housing sectors are expected to continue expanding, driven by the needs of young professionals, students, and transient workers seeking flexible, community-oriented living arrangements, especially in urban areas.

Drivers:

• Growth in the gig economy and remote work
• Rising urban population
• Increasing preference for convenience and communal living

Steady Price Appreciation

The 2025 real estate market is expected to experience steady price appreciation, fuelled by ongoing urbanisation, economic growth, infrastructure investments, favourable government policies, and the lasting attractiveness of real estate as a credible wealth option.

Drivers:

• Inflationary pressures
• Infrastructure development
• Long-term investment appeal

In 2025, India’s real estate market will further evolve, influenced by changing demands, technological advancements, and socio-economic shifts. The sector will focus on balancing affordable housing with premium options, integrating sustainability and technology, and adapting to new work and lifestyle preferences. These real estate market trends will shape the future of India’s real estate landscape, presenting both opportunities and challenges for developers, investors, and buyers.