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Real estate booms as housing sales up 77% in last 7 years: Report

With the residential sales in key cities rising nearly 77 per cent from FY19 to FY25, the Indian real estate sector is expected to remain strong in FY26 on the back of structural reforms, rapid urbanisation, and increasing investor interest, both domestic and global, according to the latest India Real Estate Report FY 2025-26 by Grant Thornton Bharat. According to the report, the industry is transforming rapidly through technology, sustainability imperatives and evolving buyer behaviour. 'Backed by investor confidence and adaptive consumer behavior, it remains a key economic pillar, set for continued momentum in FY26,' highlighted by the report, 'driven by urbanisation, infrastructure growth, and technology integration,' it added. Resilient residential market, premium shift Despite affordability concerns, the residential market has remained resilient. From FY19 to FY25, residential sales in key cities rose nearly 77 per cent, with under-construction homes making up 57 per cent of transactions in FY25, the report noted. Affordable housing showed mixed performance, with a nine per cent dip in sales during Q1 of 2025 calendar year. However, inventory levels dropped by 19 per cent, suggesting a gradual recovery. Meanwhile, demand for luxury homes above Rs 1 crore saw a strong uptick, driven by rising incomes and lifestyle shifts. Investors focus on future-ready assets 'Investment flows in FY25 reflected a clear pivot towards operational residential developments, income-yielding commercial properties, and logistics platforms,' said the report, attributing this to strong investor appetite for Grade A assets. The report states that India recorded 99 real estate deals worth $6.99 billion during FY25, with private equity accounting for nearly half at $3.15 billion. Public market activity, including IPOs and qualified institutional placements (QIPs), contributed $2.99 billion, showing capital market confidence in the sector. Tech and green trends lead new cycle Advanced technologies like blockchain, AI, and Internet of Things (IoT) are transforming property buying and selling, with virtual reality and smart homes becoming standard. 'Tokenisation of real estate can democratise access and improve liquidity if supported by regulation,' the report added. Sustainability is now a central theme. ESG-compliant projects are preferred by both institutional investors and end-users. 'We're seeing growing demand for green-certified, wellness-centric housing,' the report said. Tier-2 growth, flexible living on the rise Cities like Bhubaneswar, Nagpur, and Jaipur are emerging as residential hubs due to government-led infrastructure pushes and growing job markets. Co-living and rental housing are gaining popularity among younger, mobile professionals, backed by policy initiatives such as the Model Tenancy Act. 'Sustainable design, technology integration and backward-linked operations are key to scaling and delivering value,' Jagadish Nangineni, managing director of Sobha Group, was quoted as saying in the report. Sobha recently achieved Net Water Zero certification for its project in Thrissur. Outlook: Consolidation, digitalisation and REIT expansion Looking ahead, the report forecasts continued traction in REITs, including the rise of Small and Medium REITs (SM REITs), more platform-level consolidations, and deeper tech integration. 'Despite affordability challenges and global volatility, India's real estate sector is well-positioned to grow sustainably,' said Shabala Shinde, partner and real estate industry leader at Grant Thornton Bharat.