Explore how India’s real estate is changing in 2025

India’s appetite for luxury homes continued to grow in 2024, especially in Mumbai and the Delhi NCR region. Properties priced above ₹1.5 crore—and in some cases, upwards of ₹80 crore—weren’t just listed, they were quickly sold. It signals a clear shift in what Indian buyers want: more space, better locations, and homes that reflect lifestyle over necessity. This demand has been fueled by steady economic growth. For the third year running, India held its spot as the fastest-growing major economy. The country is expected to overtake Germany and Japan in the next few years to become the world’s third-largest economy. A stable government, manageable interest rates, and a rising middle class continue to support that outlook.

The increasing demand for luxurious homes image: shutterstock

According to Anarock Research, home sales in the top seven cities rose slightly year-on-year, with over 3.57 lakh units sold in the first nine months of 2024—up from 3.49 lakh units during the same time in 2023. Mumbai led the list with more than 1.2 lakh units sold, followed by Pune, which crossed 63,000 units. Together, these two cities accounted for over half of all homes sold in India’s top metros. New home launches dipped slightly but were still strong. Over 3.21 lakh new units hit the market from January to September, which equals 72% of all launches seen in 2023. MMR, Pune, and Hyderabad dominated the list of active development zones.

Home prices climbed across the board—by an average of 23%—driven by both higher input costs and a clear demand for better homes. Hyderabad saw the steepest price growth, with a 32% jump compared to the previous year.

One of the biggest changes in the market is the rise of luxury housing. Homes priced over ₹1.5 crore made up 28% of new supply—compared to just 19% from affordable housing. More Indians are clearly choosing comfort, privacy, and design. By the end of September, unsold inventory dropped to 5.64 lakh units—an 8% decrease from last year and the lowest level in a decade. The Delhi region saw the biggest drop in unsold stock, down 18%.Looking to 2025, most signs point to continued growth. Developers acquired over 1,600 acres of land last year—a 62% increase over 2022. That means a strong pipeline of new projects in the coming years. Price increases are expected to settle between 5–10%, but demand for high-end homes is likely to keep pushing values upward.

The office space market has also made a steady recovery. Leasing activity is expected to cross 50 million square feet by the end of 2024. A big part of that growth is coming from Global Capability Centres (GCCs), which now account for over 36% of all office leasing. Their footprint is expected to double by 2030, creating demand for up to 100 million square feet of new office space. Flexible workspaces are also on the rise. They accounted for 22% of all office leasing this year, and the total market is projected to grow by over 130% by 2028. More companies are seeking a mix of core offices and flexible areas, and they’re also demanding buildings that meet higher sustainability standards.

Retail real estate has seen a solid year too. Leasing in the top seven cities reached 5 million square feet between January and September, thanks to domestic brands and international labels. Fashion, dining, and entertainment drove two-thirds of this demand. Bengaluru, Delhi-NCR, and Mumbai led the way. Vacancies in top-tier malls remained low—between 1% and 7%—and rental rates in key cities rose slightly due to strong foot traffic and higher sales. More retail developers are now targeting Tier II and III cities, where demand is growing quickly. Over the next five years, around 40–45 million square feet of new mall space is expected to be added.

India’s overall retail market is on track to hit $2 trillion in value by 2032, up from $690 billion in 2021. Organised retail will grow at around 25% annually, driven by better retail infrastructure and rising consumer spending.

REITs are playing a larger role in commercial property. India now has over 80 million square feet of REIT-listed office space, with average occupancy around 84%. Government changes to SEZ rules—allowing floor-by-floor denotification—are expected to boost usage of those buildings as well. In FY24, Indian REITs and InvITs raised over ₹17,000 crore, up from just over ₹1,100 crore the previous year. With more rent-generating buildings in their portfolios, developers are expected to increase their REIT participation in 2025.

Real estate in India closed 2024 on a high note. In housing, the shift toward luxury and premium spaces shows no signs of slowing down. In commercial, the rebound is being led by flexible offices and long-term GCC demand. Retail, meanwhile, is proof that even in an e-commerce-driven world, Indians still value physical stores, experiences, and mall culture.

Looking ahead, the Indian real estate market is moving into a new phase—one shaped by lifestyle upgrades, smarter cities, and long-term planning. The industry isn’t just recovering—it’s adapting, maturing, and expanding in new directions.