Stability on the Horizon: India's Real Estate Market Forecast Beyond 2024 Surge

India's real estate market is on the cusp of stabilizing following a dramatic 21% price surge in 2024, according to PhillipCapital India Research. The sector update predicts a gradual rise in residential prices, propelled by a combination of sustained demand and escalating input costs. The market is expected to enter a more balanced phase by FY26.

PhillipCapital's report emphasizes that housing demand will strengthen in 2025, particularly in key urban locations. This growth is supported by record-breaking launches and a robust supply chain from reputable developers. The upcoming phase is likely to favor projects that offer high value, are developed by credible companies, and are situated in prime locations with excellent infrastructure connectivity.

Despite steady price increments, tier-2 and tier-3 cities will continue to fuel demand for affordable and mid-segment housing, benefitting from government initiatives like the PMAY and the Smart Cities Mission. In contrast, metro areas are expected to dominate the luxury segment, attracting high-net-worth individuals and foreign investors. The commercial real estate outlook remains strong, with record office leasing and vibrant retail market activity, reflecting an optimistic economic forecast bolstered by urbanization, income growth, and supportive policies.

(With inputs from agencies.)