Mumbai: The Q2 2025 Knight Frank NAREDCO Real Estate Sentiment Index reveals a promising revival in stakeholder confidence across India’s real estate market, marking a turnaround after a year-long moderation.
The 45th edition of the report highlights improved macroeconomic indicators, falling interest rates, and sustained demand in high-value residential and office segments as key drivers of this positive shift.
According to the Q2 2025 Knight Frank NAREDCO Real Estate Sentiment Index, the Current Sentiment Score increased to 56 in Q2 2025, up from 54 in the previous quarter, ending a four-quarter decline. More notably, the Future Sentiment Score climbed to 61, reflecting strong optimism for the next six months.
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These scores indicate a sector-wide alignment around India’s resilient economic fundamentals, including record GST collections of ₹2.4 lakh crore, low CPI inflation at 3.2%, and a 100 basis point repo rate cut by the Reserve Bank of India in the first half of the year.
Q2 2025 Knight Frank NAREDCO Real Estate Sentiment Index: Developer Sentiment Sees Leap
Developer sentiment saw a substantial leap, with future outlook rising from 53 in Q1 to 63 in Q2. Stakeholders are responding positively to falling borrowing costs, increasing investor confidence, and the resurgence in demand for premium residential units.
Additionally, non-developers, including banks and private equity firms, have reported growing alignment with developers, pushing their sentiment score from 57 to 60.
From a regional perspective, the South Zone led the optimism with a score of 63, backed by strong commercial and residential activity in Bengaluru and Hyderabad.
The West Zone followed with a score of 61, driven by robust demand in Mumbai and Pune, while the North and East Zones recorded scores of 55 and 61 respectively, states the Q2 2025 Knight Frank NAREDCO Real Estate Sentiment Index report.
The residential sector continues to benefit from high-ticket launches, particularly those priced above ₹1 crore. Approximately 70% of stakeholders anticipate a rise or stability in residential launches, underlining the sector’s strategic shift toward upper-end housing.
In terms of pricing, 94% of respondents expect prices to remain stable or increase, supported by double-digit year-on-year growth in cities like Bengaluru, NCR, and Chennai.
In the office market, strong leasing activity – especially by GCCs, IT firms, and flexible workspace providers – continues to drive momentum. Around 80% of respondents expect leasing volumes to stay consistent or grow further.
With demand outstripping supply in key cities, rental growth remains steady, with 93% of stakeholders forecasting either stable or increasing rents.
The broader economic outlook is also supporting this optimism. Alongside falling inflation, improved funding conditions, and high capital access (90% expect stable or better liquidity), stakeholders are positioning themselves for long-term growth. Notably, 70% believe India’s economic momentum will remain stable or improve through the remainder of 2025.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, commented, “Q2 2025 marks a critical inflection point. The sector is showing maturity with stakeholders prioritizing strategic launches and long-term planning amidst an improving macroeconomic environment.”
Hari Babu, President – NAREDCO, added, “The Q2 2025 Knight Frank NAREDCO Real Estate Sentiment Index underscores the industry’s resilience and growing investor confidence in premium housing and office segments, fueled by favorable policy support and economic tailwinds.”
The Q2 2025 Knight Frank NAREDCO Real Estate Sentiment Index affirms that India’s real estate market is poised for steady growth, anchored by strong fundamentals, policy stability, and rising consumer confidence.
