Realty sentiment stabilizes in December quarter, outlook remains optimistic, survey

India’s real estate sector ended 2025 on a stable footing, with stakeholder sentiment holding firmly in the optimistic zone during the October-December quarter, showed the Knight Frank-NAREDCO Real Estate Sentiment Index.

The Current Sentiment Score edged up marginally to 60 in the December quarter from 59 in the previous quarter, while the Future Sentiment Score remained unchanged at 61, the study showed.

The readings indicate balanced expectations for the next six months following moderation earlier in the year, supported by improving macroeconomic visibility, easing inflation and steady funding conditions.


Despite remaining below the peaks seen in 2023-24, the stabilisation of sentiment reflects resilience in office demand, improving liquidity and stable domestic economic conditions, even as global uncertainties persist.

“High-frequency indicators continue to point to sustained economic momentum, helping offset global uncertainty and supporting real estate fundamentals. Confidence is supported by stronger macro visibility, steady funding conditions, and disciplined decision-making across stakeholders,” said Shishir Baijal, International Partner, CMD, Knight Frank India.

According to him, residential markets are benefiting from higher ticket size segment demand and calibrated supply, while the office sector continues to stand out on the back of robust leasing activity and firm rentals. Together, these factors point to a sector progressing on stable fundamentals.

Funding availability sentiment improved during the quarter, with most stakeholders expecting liquidity conditions to remain stable or improve. While lenders and investors continue to remain selective, access to capital remains supportive across asset classes.

“The improvement in current sentiment and the continued optimism in future sentiment suggest a market moving forward in a balanced manner. Residential markets are showing clearer signs of stability, supported by steady end-user demand and a disciplined approach to new supply. The office segment remains positive, backed by consistent leasing activity and corporate expansion,” Parveen Jain, President, NAREDCO.

Sentiment around overall economic momentum also strengthened, aided by easing inflation, accommodative monetary conditions and continued public capital expenditure, the survey showed.

Zonal future sentiment improved modestly across all regions, with all zones staying in the optimistic zone. The South Zone retained the highest score at 62, driven by strong office leasing in Bengaluru and Hyderabad and resilient higher ticket residential demand.

The East Zone improved to 62 on the back of steady mid-segment housing demand, while the West Zone strengthened to 62, supported by stable commercial activity and a calibrated residential development approach. The North Zone recovered to 59, reflecting stabilising sentiment after softness earlier in the year.

Institutional stakeholders, including banks, financial institutions and private equity funds, recorded a higher Future Sentiment Score of 63, indicating rising confidence in asset quality and liquidity conditions. Developers remained more measured, with a score of 58, highlighting a cautious approach to growth aligned with demand visibility and funding prudence.

Residential sentiment improved modestly, supported by steady demand in higher ticket size segments and disciplined supply strategies, while the office segment continued to anchor overall confidence amid strong leasing expectations and limited availability of quality Grade A space.