As India entered 2026, the real estate sector is positioned for measured yet sustainable growth across all major segments, industry experts said on Friday. Strong fundamentals, expanding premium housing demand, and adaptive retail and logistics ecosystems are expected to continue attracting both domestic and international capital. While 2025 presented several macroeconomic and geopolitical challenges, 2026 is anticipated to be a year of recalibration and renewed economic momentum. This outlook is supported by India’s strong GDP growth of 8.2 per cent in Q2 FY26, recorded despite global uncertainties and shifting trade dynamics. With this growth rate, the country remains firmly on track to become the world’s third-largest economy by 2030, with an estimated GDP of $7.3 trillion. To reinforce economic development, the government implemented a mix of fiscal and monetary measures. Fiscal initiatives included the rationalisation of GST rates and revisions in income tax slabs. On the monetary front, the central bank reduced the repo rate to 5.25 per cent and maintained a neutral policy stance, a move expected to support economic activity in 2026. Overall, the year is poised to witness holistic sectoral growth, strengthened real estate activity, and improved investor sentiment. The office market is projected to maintain its upward trajectory in 2026, with gross absorption expected to reach 75–80 million square feet, driven largely by sustained expansion from global capability centres. The IT–ITeS and BFSI sectors are expected to remain key contributors. Flexible workspace operators are also likely to consolidate their presence as occupiers prioritise agility and hybrid workplace models. Leasing activity is expected to be led by Bengaluru, Chennai, and Hyderabad, with Mumbai and Pune likely to record an increased share. The year 2025 has been described as a landmark period for India’s real estate sector, marked by significant policy reforms, robust demand across asset classes, and a renewed focus on sustainable urbanisation. Looking ahead, Tier-II and Tier-III cities are expected to play a larger role in the sector’s growth in 2026, supported by improved connectivity, rising employment opportunities, and emerging industrial corridors. The outlook for fiscal 2027 is also optimistic, with demand recovery driven by rising incomes, lower interest rates, and continued infrastructure development. Commercial real estate is projected to sustain its growth momentum, with demand expected to rise by 5–7 per cent and supply by 9–11 per cent, supported by strong leasing activity from global capability centres, flexible workspace operators, and the IT/ITeS and BFSI sectors.
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