India real estate report FY 2025-26: Key trends and insights

In the latest edition of Realty Bytes, we explore the rapid transformation of India’s real estate sector in FY 2025-26, driven by technology adoption, sustainability imperatives, and increasing institutional participation. The sector is emerging as a key pillar of the country’s economic revival. This report highlights how innovative investment models such as small and medium Real Estate Investment Trusts (REITs) and real estate tokenisation are enhancing accessibility and transparency. At the same time, platform-based partnerships and mid-sized consolidations are contributing to increased transactional momentum across the market.

Key highlights

• India’s residential market maintained its upward momentum in FY2024-25, though trends varied by price segment. Affordable housing saw mixed results—sales fell 9% YOY in Q1 2025, but unsold inventory reduced by 19%, indicating gradual absorption.
• Flexible living models are gaining ground, especially among younger professionals and migrant populations in urban centers. Co-living spaces and organised rental housing are expanding, driven by affordability pressures, lifestyle flexibility, and supportive policy frameworks like the Model Tenancy Act.
• Innovations such as artificial intelligence (AI), machine learning, and big data analytics, will revolutionise property valuations, market predictions, and personalised property offerings. The rise of smart homes, powered by the Internet of Things (IoT), will enhance energy efficiency, security, and convenience.
• Private equity (PE) remained the dominant funding channel, accounting for USD 3.15 billion across 48 transactions, nearly half of the overall investment activity.  M&A volumes increased notably to 36 deals, although values moderated to USD 619 million, highlighting a strategic shift toward mid-sized consolidations and platform-driven acquisitions.

The edition also explores evolving consumer preferences, with a marked shift toward premium and low-density housing formats, flexible rental options, and lifestyle-led developments. Demand is increasingly gravitating toward Tier-2 cities and well-connected suburbs, supported by hybrid work trends and infrastructure-led growth. Despite affordability pressures and global uncertainties, the sector has shown remarkable resilience, underpinned by policy reforms, urbanisation, and digital innovation.

Furthermore, the report highlights the rising significance of alternative real estate assets such as data centers, logistics parks, and warehousing facilities. These segments are attracting substantial interest from institutional investors amid the expansion of India’s digital economy and national infrastructure initiatives. Along with the growing acceptance of REITs and fractional ownership, these trends signal a broader shift toward a more diversified, tech-enabled, and investor-friendly real estate ecosystem.

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India Real Estate Report FY 2025-26

This edition of Realty Bytes explores how technology, sustainability, and new investment models are reshaping India’s real estate sector.

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