Neel AcharyMumbai, 17th November, 2025: The 46th edition of the Knight Frank – NAREDCO Real Estate Sentiment Index Q3 2025 (July–September) highlights a sustained positive outlook across stakeholders of India’s real estate sector, underscoring its resilience amid a challenging global economic environment. The Current Sentiment Score rose to 59 in Q3 2025 from 56 in the previous quarter, indicating improving confidence among stakeholders, while the Future Sentiment Score remained stable at 61, maintaining its position in the optimistic zone.
The index reflects strengthening market fundamentals driven by robust office leasing activity, resilient residential demand especially in high –ticket segments, and supportive macroeconomic conditions. Liquidity has remained healthy, inflation has eased, and policy consistency has reinforced confidence among developers and investors alike.
Overall Sentiment Score: Gradual Recovery in Stakeholder Sentiment
Improved confidence stems from stable interest rates, benign inflation, and healthy domestic consumption, all of which continue to underpin growth. The Current Sentiment Score of 59 marks the highest level recorded in 2025 so far, reflecting a broad-based improvement across both developer and non-developer communities.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said,
“The sustained optimism reflected in the Q3 Sentiment Index underscores the sector’s resilience and adaptability. Both current and future sentiment scores remain comfortably in the positive zone, reaffirming confidence in India’s economic stability and long-term growth story. Demand in the premium residential segment remains healthy, while the office market continues to demonstrate structural depth with strong leasing pipelines. Stable interest rates, easing inflation, and improved liquidity have reinforced overall sentiment. As we approach 2026, we expect the market to maintain steady momentum across asset classes.”
Zonal Future Sentiment Score
Zonal sentiment trends in Q3 2025 suggest stability across most regions, with optimism prevailing nationwide. The South Zone remained the most buoyant at 62, even though the score moderated by one point. Driven by strong leasing momentum in Bengaluru and Hyderabad alongside demand for high ticket size housing segments. The North Zone maintained its recovery, inching up to 56 on the back of steady office activity in NCR. The East Zone eased slightly to 59, reflecting moderated residential launches in first 3 quarters of 2025 compared to the same period in 2024, while the West Zone dipped marginally from 61 to 59, as robust office absorption in Mumbai and Pune offset a measured momentum in residential sector.
Developers Tread Cautiously; Non-Developers Maintains Steady Optimism
Developers’ sentiment eased slightly to 59 from 63, reflecting cautious optimism amid elevated input costs and slower traction in the mid to low segment housing categories. Non-developers, including banks, financial institutions, and private equity funds, maintained a steady stream of optimism for Future Sentiment to a score of 61. The alignment between measured developer sentiment and sustained non-developer optimism indicates a market confidence anchored in liquidity, asset quality.
Residential sentiment continued to strengthen in Q3 2025, reflecting cautious demand and strategic supply management. About 71% of respondents expect new launches to remain stable or increase, up from 70% in Q2 2025, as developers focus on higher-ticket projects while moderating activity in lower ticket size segments to prevent oversupply. Optimism around residential sales have also grown where 74% respondents expect sales to either remail stable or improve, compared to 52% in Q2 2025 with similar opinion. This optimism is supported by rate cuts, subvention schemes, and other buyer-focused incentives enhancing affordability. Meanwhile, 92% of respondents anticipate prices to remain stable or rise, indicating sustained confidence. Markets such as NCR, Bengaluru, and Hyderabad continue to drive this price momentum, posting Y-o-Y increases of 13%–19% in Q3 2025 compared to the same period last year, underscoring strong demand in the high and upper-mid ticket size housing segments.
The office segment remains the most optimistic among all asset classes, supported by steady occupier demand and well-calibrated new supply. Leasing sentiment strengthened further, with a growing share of respondents expecting activity to increase or remain stable over the next six months. About 78% of stakeholders anticipate stability or moderate growth in new supply, reflecting developers’ disciplined approach amid sustained absorption levels. Additionally, 95% of respondents expect office rents to remain stable or rise, driven by limited Grade A availability, steady leasing momentum, and increasing pre-commitments. The sector continues to draw strength from GCC expansion, IT-led leasing, and growing flex-space demand.
Macro and liquidity indicators remain favourable for real estate growth. 78% of respondents expect India’s overall economic momentum to remain stable or improve, supported by easing inflation and robust fiscal spending. While 86% anticipate unchanged or improved funding conditions, aided by the RBI’s accommodative stance and active capital deployment toward premium housing and commercial assets. Improved liquidity, stable rates, and resilient domestic demand have together strengthened the sector’s foundation for sustainable expansion.
Parveen Jain, President, NAREDCO, further added,
“The Knight Frank NAREDCO Real Estate Sentiment Index Q3 2025 reflects steady confidence in India’s property market. Developers and investors remain optimistic, supported by stable demand, policy continuity, and healthy funding conditions. Premium housing and office spaces drive growth, signalling a balanced, resilient outlook for the sector in the coming months.”
The Knight Frank–NAREDCO Real Estate Sentiment Index Q3 2025 reaffirms that India’s real estate sector remains firmly on a growth trajectory. Despite global headwinds, structural fundamentals, steady policy support, and consistent demand from occupiers and end-users continue to drive optimism. With inflation moderated, funding steady, and development activity well-calibrated, the sector enters Q4 2025 with balanced confidence and sustained growth potential.
