Residential demand in India’s major cities is predicted to decrease by 2–4% this fiscal year due to a high base effect, as per a report by Crisil Intelligence. However, the trend of premiumization is set to continue. Commercial real estate demand, on the other hand, is anticipated to grow by 5–7%, with supply increasing by 9–11%, driven by various sectors.
The decline in residential demand is a result of significant growth in previous years and influenced by factors like capital value appreciation and city-specific regulations. Despite the slowdown, there is a noticeable shift towards premium properties, characterized by increased capital values and larger apartment sizes. Capital values are expected to rise moderately by 5–7% this fiscal year, a decrease from the previous two years.
Crisil suggests that the momentum in commercial real estate might slow down in the next fiscal due to a strong base established over the past few years. However, a positive outlook is projected for fiscal 2027, driven by factors like rising incomes, lower interest rates, and ongoing infrastructure enhancements. Aniket Dani, Director of Crisil Intelligence, remains optimistic about the long-term growth and stability of the Indian real estate market.
Another report highlights that in 2025, traditional office space uptake increased by 7% to 58.5 million sq ft, while flex space uptake reached 13 million sq ft, representing about 18% of total leasing. The demand for office spaces in 2025 was diverse, with significant uptake from sectors like BFSI, engineering & manufacturing, and consulting firms. New supply in top cities also saw a 5% rise to 56.5 million sq ft, with Bengaluru, Hyderabad, and Pune accounting for a majority of completions.
