India’s Residential Real Estate Set to Capture 70% by 2026

India’s property landscape is entering a transformative era. According to a report by investment firm Equirus Capital, the residential real estate segment is expected to account for nearly 70% of the market by 2026, with more than 10 million new homes in the pipeline. Backed by strong buyer sentiment, trusted developers, and economic stability, housing continues to dominate the nation’s growth story.

Residential Sector Surges Ahead

In Q1 CY25, sales touched 93,280 units, reflecting robust demand. The surge is driven by buyers looking for premium and well-located properties, supported by a stable financial environment. This mirrors the resilience of India’s housing market, which has become the largest pillar within the country’s real estate ecosystem.

Commercial Market Expands Steadily

Beyond housing, the commercial real estate market has shown steady expansion. Leasing volumes hit 20.3 million sq. ft. in Q1 2025, marking a 5% YoY growth. Projections estimate the commercial segment to grow at a 19.8% CAGR, reaching a staggering $253 billion by 2033.

Retail and Hospitality on the Rise

Retail real estate is also experiencing momentum, with FDI policies boosting activity. Leasing touched a 5-year high of 3.1 MSF in H1 2024, while 9 million sq. ft. of fresh retail space was added in 2025. Hospitality is following suit, with occupancies projected to rise at a 3.5–4% CAGR, supported by 12,000 rooms added in 2023 and another 15,000–16,000 planned by 2025.

Investor Confidence Strengthens

Investor sentiment has soared since the pandemic. Between 2020–23, the sector attracted over US$400 million, with another US$2.3 billion in the pipeline. The government’s amendment on SEZ regulations has also unlocked 15–18 million sq. ft. for IT/ITeS usage, driving further momentum.

Premium Housing Leads Growth

Data from the CREDAI-CRE Matrix report highlights housing sales worth ₹3.6 lakh crore in H1 2025 across Tier-1 cities, a 9% increase YoY. Interestingly, despite a 4% dip in unit sales, the average ticket size rose 14% to ₹1.42 crore, signaling a clear shift toward premium housing.

NCR led with a 26% revenue share, with luxury homes above ₹3 crore forming 73% of sales value.
MMR followed closely at 23%, fueled by ultra-premium demand.
Southern cities like Chennai (+23%) and Bengaluru (+4%) also recorded growth.
Kolkata and Ahmedabad surged, with Kolkata’s luxury share doubling in 2025.

Sentiment and Outlook

India’s real estate sector has regained confidence, as reflected in the Q2 2025 Sentiment Index rising to 56, while Future Sentiment climbed to 61. Developer optimism, aided by easier financing, RBI repo cuts, and demand for premium housing, indicates a promising outlook. With 94% expecting stable or higher prices, the stage is set for residential dominance in the coming years.