Outlook 2025

2024 has been a transformative year for the real estate industry as the sector surged, supported by rising urbanisation, shifting lifestyles, and increasing demand across affordable, mid-income, and luxury segments.

Valued at approximately $493 billion, the real estate sector contributes 7.3% to India’s GDP and is the second-largest job creator after agriculture. By 2030, housing demand is anticipated to grow to around 70 million units, driven by urban infrastructure projects, favourable policies and a resilient economy.

As infrastructure projects accelerate and the economy expands, real estate’s contribution to GDP is poised to rise, solidifying its position as a key pillar in India’s journey toward sustained economic growth and urban modernisation. The outlook for 2025 remains positive as experts see a spurt in demand in the residential sector as well as in commercial real estate. Some of the key trends in the new year are as follows as per industry mavens:

1.Reduction in CRR to boost demand

Developers expect the strong demand to continue and growth across all housing segments and commercial segments. Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited shared that key factors supporting this positive outlook include India’s robust economic growth, stable interest rate, improved consumer confidence, and the dominance of reputable developers capturing significant market share. Additionally, the RBI’s recent reduction in the Cash Reserve Ratio (CRR) is likely to translate into lower lending rates as banks pass on the benefits to borrowers. With inflation under control and a resilient economy, there is also a strong possibility of a policy rate cut in upcoming MPC meetings. Lower interest rates would enhance affordability and further boost buyer sentiment, driving continued momentum in the real estate sector.

2. Demand for Integrated Townships

Tier-2 cities like Chandigarh, Mohali, Zirakpur and Panchkula emerged as strong contenders for residential and commercial real estate, driven by their improved infrastructure, seamless connectivity, and demand for high-quality living spaces. Piyush Kansal, Executive Director, Royal Estate Group said, “For 2025, we anticipate sustained growth in both residential and commercial segments. The residential market will see demand for integrated townships offering luxury, sustainability, and modern amenities, while the commercial sector is set to benefit from the influx of IT companies, startups, and retail brands seeking prime locations.”

3. Luxury housing demand to continue

In 2024, as per an Anarock Capital report, real estate developers raised Rs 1,281 crore via qualified institutional placements and plan to launch 253 million square feet of housing over the next five years, thus showcasing immense confidence in the sector’s resilience.

Accordingly, the strong momentum is likely to persist in 2025 as well. Delhi-NCR is expected to add 1,00,000 new units in 2025, with luxury and ultra-luxury segments projected to grow by 20 per cent as per a Cushman & Wakefield report.

The completion of key infrastructure projects like the Delhi-Mumbai Expressway and the push for sustainable development will further bolster the market.

Luxury housing will likely continue its upward swing, buoyed by rising HNI numbers, infrastructure advancements, and evolving buyer preferences.

There’s also a rising demand for mid-segment luxury housing priced above Rs 2 crore, catering to aspirational millennials. Projects focusing on wellness amenities, like air purification systems and meditation spaces, would continue to gain further traction, said Akash Khurana, President and CEO, Krisumi Corporation.

4. Increased activity in retail spaces

With homebuyers seeking eco-friendly, technology-driven homes, the residential segment will shift towards integrated developments offering sustainability and smart living solutions. On the commercial front increased activity is expected in retail spaces, co-working hubs, and data center infrastructure, driven by expanding businesses and startups.

The commercial segment, too, is gaining traction, particularly in Tier-2 cities, where startups, retail brands, and IT firms are seeking spaces that foster innovation and collaboration.

5. Co-working spaces to witness surge in demand

The co-working industry has gained greater traction with corporates and MNCs continuing to make a beeline for coworking spaces that have emerged as strong centres of growth. While major metro cities have been the key markets for coworking spaces, there’s a growing demand in Tier-2 and Tier-3 cities, too, making the market more diverse. As businesses increasingly shift offices from traditional and conventional set ups to coworking spaces, commercial real estate operators will increasingly lease space to flexible operators, and both will grow exponentially and co-exist in a win-win situation. The coworking sector will also see consolidation, where larger operators may acquire smaller players to expand their footprint, according to Manas Mehrotra, Founder, 315Work Avenue

6. Tier-II cities to gain traction

In 2024, Tier-II cities have emerged as the new frontier for residential real estate, driven by a mix of improved infrastructure, enhanced connectivity, and the evolving needs of homebuyers seeking both value and quality. “ Cities like Chandigarh, Mohali, Zirakpur, Panchkula have established themselves as leading destinations for those looking to have a balanced lifestyle and luxury living. With its world-class urban planning, green spaces, and a blend of modern amenities, Chandigarh's real estate market has become increasingly attractive to both homebuyers and investors. Developers are of the view that Chandigarh’s residential market to continue its upward trajectory, offering opportunities for luxury and sustainable living in a well-connected, progressive city.

7. Emergence of healthier living environment

Tier-II cities like Mohali and Panchkula, are witnessing a paradigm shift towards wellness-focused developments, reflecting the growing demand for healthier living environments. The integration of wellness features, such as expansive green spaces, natural lighting, and holistic amenities, is no longer an option but a necessity. This concept will continue to gain prominence, driven by increasing awareness of the benefits of balanced and sustainable lifestyles. Moreover, developers in the region witnessed spurt in demand engaged for such communities which is likely to continue in 2025.