India’s real estate industry is in the midst of a pivotal shift in 2025—with robust policy reforms, a surge in premium house sales, and a record in leasing commercial office space, driving the market’s growth, according to a report by Equirus.

The first half of 2025 has witnessed a perceptible shift in consumer preferences in the housing market. Luxury homes, priced at ₹1 crore and above, have accounted for 62% of residential sales, compared to 51% in the same period last year. On the other hand, affordable housing has declined by 38% in the same period, indicating a rise in affluence among homebuyers and increased confidence among buyers in established realtors and developers.

Markets in Delhi-NCR, Bengaluru, and Chennai have led the way in premium project launches, with prices in these markets posting double-digit gains. This change is primarily driven by lifestyle upgrades and an increase in investors seeking high capital appreciation. Developers and realtors, too, are prioritising high-margin residential project launches. Cities like Bengaluru, Chennai, and Kolkata are witnessing record project growth.

India’s office market, on the other hand, is well-positioned to post a record-breaking year in 2025. Gross leasing volumes are expected to cross 90 million square feet this year, the report says, surpassing the previous year’s volumes. Leasing in the first half of the year totalled 42 million square feet, driven by robust demand from global capacity centres, IT-BPM firms, BFSI, and flexible co-working space operators.

Delhi-NCR, Bengaluru, and Mumbai recorded more than 60% of leasing activity. On the other hand, net absorption rose 19% year-over-year. A steep rental growth is also observed in Mumbai and Hyderabad, the report notes. This, in tandem with a lag in supply, reduced vacancy rates and spiked rents across major cities in India.

On the policy and regulatory front, sweeping reforms are transforming and enabling greater market transparency, instilling investor confidence. According to the report, the government is planning to digitise 100% of the land records, with 99.8% of the existing land records already digitised. This move by the government, the report claims, will unlock greater FDI, for it will curtail fraud, litigation, and ambiguous titles. This, in turn, the report says, will facilitate easier transactions and credit access, aligning India with global standards.

The Maharashtra Housing Policy 2025 proposes a law similar to RERA for redevelopment projects, aimed at protecting homeowners from delays, stalled projects, and associated risks. It includes a proposed ₹2,000 crore investment in self-redevelopment. Meanwhile, Uttar Pradesh has approved new MSME land policies to boost industrial growth through transparent e-auctions and regionally standardised plot rates, positioning the state as a hub for Global Capability Centres with substantial developer backing and large commercial developments.

The report also highlights the robust activity from private equity and capital markets, which was witnessed throughout the first half of the year. Major deals included key investments made by prominent firms such as Blackstone, HDFC Capital, and GIC across residential, mall, and IT park sectors. New capital market deals involved major IPOs such as Knowledge Realty Trust REIT, Sri Lotus Developers, and Smartworks Coworking Spaces, the report highlights.

India’s real estate outlook for the remainder of 2025, according to Equirus, remains bullish. It will be driven by regulatory reforms, in tandem with surging premium demand for residential property, record commercial leasing for office spaces, and strong influx of institutional capital.