While global house prices grew modestly by 2.4% annually in Q3 2025 — aided by decisive monetary easing from central banks — India’s performance underscores deep-rooted end-user demand, improving affordability, and a stable macroeconomic backdrop.

Turkey topped the global charts with a staggering 32.2% nominal price surge, followed by North Macedonia (25.1%) and Portugal (17.7%). However, in real (inflation-adjusted) terms, many high-growth markets saw gains eroded — with Turkey posting negative real growth (-0.8%).

India’s Top 10 Global Ranking – Q3 2025

Source: Knight Frank Research

Strong Sales Momentum & City-Level Price Surge

Residential sales across India’s top eight cities remained steady in 2025 at over 348,000 units, with H2 2025 volumes hitting the highest level since 2013. The quarters-to-sell ratio stayed balanced at 5.8 quarters, even as unsold inventory rose — largely due to higher-value project launches.

Price appreciation was widespread and led by:

• National Capital Region (NCR): +19% YoY
• Hyderabad : +13% YoY
• Bengaluru : +12% YoY
• Mumbai : +7% YoY

A structural shift is clearly visible: homes priced above INR 1 crore now account for around 50% of total sales — reflecting buyers’ preference for larger, better-quality homes in well-connected locations.

Developers have responded prudently — moderating new launches, focusing on execution, and offering targeted financing incentives rather than broad price corrections — helping sustain absorption.

Global Context & Outlook

Globally, easing monetary policies in Q3 2025 began supporting demand, but real price growth remains constrained in many markets due to lingering inflation. Emerging and select European markets led nominal gains, while several mature markets (Northern Europe, parts of East Asia) continued to see declines.

Liam Bailey, Knight Frank’s Global Head of Research, noted: “Nominal growth has edged higher again as central banks pivot towards cuts, but real gains are still hard-won. To see firmer growth into 2026, policymakers will need to maintain easing while inflation continues to retreat.”

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, commented: “India’s housing market continues to stand apart in a global environment that remains uneven. The combination of strong economic growth, easing financial conditions and a decisive shift towards end-user-led demand has created a more mature and resilient residential cycle. As we move into 2026, we expect the market to be defined by stable absorption, selective price appreciation and disciplined supply, rather than speculative excess.”

With India’s economic fundamentals robust and monetary conditions turning supportive, the residential sector remains well-positioned to sustain its global outperformance in the year ahead.

Also Read: Good news: Home prices to correct by 15%

The post India’s Housing Market Shines Globally: 9.6% Price Growth in 2025 Outpaces World Average appeared first on Square Feat India.

The survey reveals that 87% of investors, by assets under management, plan to increase their direct exposure to commercial real estate in 2026, while 62% expect to be net buyers. This marks a clear shift from the cautious sentiment seen in recent years. Against this backdrop, India is steadily strengthening its position as a preferred destination for long-term global capital, offering scale, income visibility and improving asset quality.

While the UK and Germany continue to top the list of global capital destinations, India is transitioning from a peripheral emerging market allocation to a strategic component of Asia-Pacific real estate portfolios. Investors are increasingly attracted to India’s resilient occupier demand, expanding base of institutional-grade assets and favourable demographic profile.

Offices have re-emerged as the most targeted asset class globally, with 69% of investors planning allocations in 2026. However, capital remains selective, focusing on well-located, ESG-compliant and future-ready office assets. This trend closely mirrors India’s office market, where leasing activity continues to be driven by Global Capability Centres (GCCs), technology firms and domestic corporates, together accounting for nearly three-fourths of demand across major cities such as Mumbai, Bengaluru, Delhi-NCR, Hyderabad, Pune and Chennai.

Beyond offices, living sectors have emerged as the second most preferred asset class globally, with 65% of investors targeting allocations. Although institutional rental housing and student accommodation are still nascent in India, Knight Frank notes that these segments present a sizeable medium- to long-term opportunity due to rapid urbanisation and a young, mobile population.

Industrial and logistics assets remain a high-conviction segment, supported by supply-chain reconfiguration, e-commerce growth and infrastructure investment—trends that are particularly pronounced in India. Retail assets have also returned to investor focus globally, with over half of respondents planning allocations, reflecting stabilisation and renewed interest in dominant, experience-led shopping centres.

The survey highlights a growing preference for joint ventures and capital partnerships, with 68% of investors—representing USD 94 billion of planned investment—open to collaborative structures in 2026. This approach is especially relevant in India, where local execution capability, governance and platform scale play a critical role in investment success.

Operational real estate segments such as data centres, healthcare and infrastructure are also gaining traction globally. In India, rising digital adoption, expanding healthcare needs and sustained public infrastructure spending are translating into growing investor interest across these sectors.

Knight Frank noted that interest rates remain the single most influential factor shaping investment decisions, followed by occupier demand and bond yields. While geopolitical risks persist, investors are increasingly willing to look beyond short-term volatility and focus on repriced assets and sectors aligned with long-term structural tailwinds.

Also Read: India’s Real Estate Market Shows Resilience in 2025 Despite Global Headwinds

The post Global Real Estate Investors Return in Force in 2026 as India Gains Strategic Importance appeared first on Square Feat India.

A repo rate cut is one of the quickest ways to soften the cost of borrowing. For homebuyers, this translates into lower EMIs, especially because most home loans today are linked to external benchmark rates that transmit policy changes faster than earlier systems. If banks pass on the full 25 bps cut, borrowers can expect a meaningful drop in monthly EMIs, improving affordability across segments.

Lower EMIs Can Revive Demand — Especially in Affordable & Mid-Income Housing

Real estate experts view this decision as well-timed and transformational.

Shishir Baijal – Knight Frank India

“We welcome the RBI’s positive move to cut rates by 25 bps, as it signals growing confidence that inflation will remain low on a durable basis. The reduction in borrowing costs should offer timely relief to the real estate sector… We hope this will be instrumental in boosting affordable and mid-income housing sales, which have been witnessing a sequential decline over the past few quarters.”

Baijal’s point about sequential declines is critical—end-user demand in these segments had begun softening as property prices rose across major markets.

Price-Rise Pressure Meets a Rate-Cut Cushion

According to ANAROCK Research, average housing prices across India’s top 7 cities jumped nearly 10% in 2025. For many buyers, this created a affordability mismatch—even if incomes were rising.

Anuj Puri – ANAROCK Group

“The RBI’s decision to cut the repo rate by 25 bps is a distinct positive… this move further sweetens the value proposition for homebuyers, particularly in the affordable and mid-income segments which are highly sensitive to interest rate fluctuations.”

“This rate cut provides a critical cushion to affordability… encouraging aspiring homebuyers who had paused their decisions due to price hikes to finally take the plunge.”

Puri also highlights a crucial factor: swift transmission.

“If banks swiftly pass on this rate cut to borrowers, we anticipate a renewed surge in sales velocity carrying firmly into Q1 2026.”

Luxury housing is expected to stay strong irrespective of the rate cut, but the biggest boost will likely come from fence-sitters in the mid and affordable categories.

Developers See This as a Sentiment Lifter for Both Buyers & Builders

Manju Yagnik – Nahar Group / NAREDCO Maharashtra

“A 25 basis point rate cut at this stage will meaningfully support homebuyer sentiment and improve affordability across categories. Demand has remained resilient despite elevated prices, and a reduction in borrowing costs will give fence sitters the confidence to move ahead with their purchase decisions.”

Yagnik adds that developers too gain from a softer rate environment, especially with persistent inflationary pressures in construction materials.

“The real estate sector has been navigating higher input costs… so a softer rate environment will ease financial pressure for both buyers and developers.”

Rupee Depreciation Adds Another Layer to the Demand Story

Dharmendra Raichura – Ashar Group

“The rate cut to 5.25% gives an immediate boost to affordability for home-buyers… At the same time, the depreciation of the rupee makes imported building materials costlier — a challenge for developers’ margins.”

Interestingly, this same rupee weakness creates a positive effect too:

“For NRIs… the weaker rupee makes Indian real estate more attractive and affordable, balancing demand dynamics.”

Developers who manage cost inflation well stand to gain from increased NRI participation and a broader buyer base.

A Macroeconomic Signal of Confidence — With Direct EMI Relief

Dr. Samantak Das – JLL India

“The RBI’s decision to cut the repo rate by 25 bps is a powerful, proactive signal that strategically leverages India’s macroeconomic strength — a robust 8.2% Q2 GDP expansion alongside record-low inflation.”

Das stresses that this is not a reactive move but a strategic push to make growth more inclusive.

“For the residential sector, this is a direct boost to affordability… Given the high penetration of external benchmark-linked loans, the transmission to homebuyers is expected to be quick, providing tangible EMI relief.”

He also notes that India saw price resistance in the affordable and mid-segment categories this year, with projected residential sales 8–9% lower than last year in the top cities.

The repo cut, therefore, is seen as a catalyst:

“This move… will activate the crucial segment of first-time affordable and mid-market homebuyers who have been waiting on the sidelines.”

Das expects demand revival not just in metros but across India’s Tier 2 and Tier 3 cities as well.

What This Means for You: Lower EMIs, Higher Eligibility

If banks pass on the full 25 bps cut:

• Your home loan EMI will reduce across floating-rate loans.
• Loan eligibility increases because your EMI-to-income ratio improves.
• First-time buyers in mid-income segments will find it easier to enter the market.
• Developers get relief through better sales momentum and sentiment stability.

This rate cut has arrived at a moment when the market needed a confidence push—and it may very well carry the housing sector with stronger momentum into 2026.

Also Read: RBI Repo Rate Hike May impact Home buyer sentiments

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Monthly snapshot (Nov-24 → Nov-25)

Key immediate takeaway: November recorded a healthy recovery in transactions relative to October (+5.3% units) but revenue increased only by ₹3 crore, i.e., effectively flat.

YTD (Jan–November) annual comparatives (2013–2025)

Context: Jan–Nov 2025 totals — 135,807 registrations (+5% YoY) and ₹12,224 crore revenue (+11% YoY). Respectable annual gains, but the late-2025 monthly pattern (flat revenue in Nov despite higher units) shows momentum softening.

Ticket-size and area splits (Nov-24 vs Nov-25)

Ticket size share

Area (unit size) share

Micro-market share (by region)

What the full dataset adds to the interpretation

1. Shift within the mid-market, not an across-the-board upcycle.
   • The share of ₹1–2 crore deals increased (31% → 33%). This means growth is concentrated in mid-tier transactions rather than high-ticket buys. That supports why registrations rose but revenue didn’t proportionally.
2. Luxury is rising but too small to move totals.
   • The ≥₹5 crore segment rose from 5% to 7%, but that slice is still tiny. Even strong luxury sales won’t lift city-wide revenue much unless their absolute numbers grow rapidly.
3. Smaller-to-mid unit sizes still dominate.
   • Units ≤1,000 sq ft account for 84% of registrations (38% up to 500 sq ft + 46% 500–1,000). That composition favors lower ticket sizes per unit, capping revenue growth.
4. Geographic concentration increases market fragility.
   • Western + Central Suburbs = 85% of registrations (Western 56%, Central 29%). Overdependence on a few corridors is risky — any microeconomic shock or supply glut there could dent overall figures.
5. Month-to-month volatility during 2025.
   • Several months show swings: Mar-25 had a spike (15,501 units, ₹1,589 cr) and Sep-25 also lifted revenue; however, late-year months (Oct → Nov) show a pause in revenue improvement despite higher volumes. That inconsistency signals uneven demand and possible churn from developers (discounts, incentives).

So what does flat revenue with higher registrations indicate — the critical read

• Price sensitivity and discounting: Developers may be reducing effective prices, giving concessions or incentives to keep sales moving. That raises unit counts but not the stamp-duty-able transaction value sufficiently to boost revenue.
• Shift to smaller / lower-value inventory: Increased share of 500–1,000 sq ft units and more transactions in the ₹1–2 crore band mean individual ticket sizes are not rising fast enough.
• Selective luxury demand: While luxury appetite exists (≥₹5 cr up to 7%), it’s a small base; hence, it cannot offset the larger mid/affordability segment.
• Stretched affordability at the bottom: The share of sub-₹1 crore transactions has dropped (46% → 42%), which can be read two ways: (a) affordability worsening and buyers inching up to slightly pricier/less affordable options, or (b) displacement of the lowest-end buyers due to price pressure. Both are concerning.
• Market not uniformly healthy: Volume alone is a poor metric of market health; real price discovery and revenue traction are. The revenue flatline amid rising registrations suggests demand is transactional, not value-led — buyers are acting, but not at higher price points. That’s a leading warning sign of price plateauing or an upcoming correction in nominal price growth.

Policy & developer implications (brief)

• For policymakers: If revenue growth stalls even with rising volumes, stamp-duty revenues will not keep pace with expectations. Targeted measures to broaden demand geographically, or to incentivize affordable supply in growth corridors, may be needed.
• For developers: Reliance on incentives to drive bookings hurts long-term pricing. Firms should manage inventory quality and avoid discounting that compresses future margins and market perception.

Conclusion — the blunt, critical line

November 2025’s data is a cautionary tale. Registrations are up relative to October — good on the surface — but revenue barely budged. That divergence is a classic early indicator that the market’s momentum is volume-driven rather than price-driven. Unless November’s pattern reverses into stronger ticket-size growth (sustained luxury volume or genuine price appreciation across mid-tier inventory), Mumbai could see price stagnation and margin pressure for developers next year. In plain terms: the city is selling more homes, but not selling them for more. That’s not a healthy upcycle — it’s a fragile one.

Also Read: Mumbai property registrations in October 2023 surge 26% YoY

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National, 18 November 2025: Actor Saif Ali Khan has purchased commercial property worth ₹30.75 crore at Kanakia Wallstreet, Andheri East, marking a significant addition to his real estate investment portfolio.

The transaction was executed by Knight Frank and Volney, a real estate advisory and investor network firm founded by Rohan Sheth. Volney also recently facilitated the office leasing deal for Elon Musk’s SpaceX–Starlink at Kanakia Boomerang in Chandivali.

Details of the Transaction

The acquisition consists of two adjoining office units — 901 and 902 — in Wing A of Kanakia Wallstreet.
Key specifications include:

• Total carpet area: 5,682 sq. ft.
• Salable area: 9,659 sq. ft.
• Parking: 6 car parking spaces
• Seller: Apiore Pharmaceutical, a US-based pharma company

The purchase is understood to be for either personal use or long-term investment.

Location and Occupier Profile

Located in Andheri East, Kanakia Wallstreet has become a preferred commercial hub due to its connectivity to the airport, metro network, and nearby business districts.
The complex houses several well-known occupiers, including Nuvama, Mannapuram Finance, Coca-Cola, Tradebulls, and ICICI Lombard.

Market Context and Expert View

Rohan Sheth, Founder of Volney, said:

“Andheri East has emerged as one of Mumbai’s key commercial corridors due to connectivity, infrastructure, and consistent rental demand. It attracts both institutional and individual investors looking for stable long-term assets.”

He added that there is increasing participation from celebrities and high-net-worth individuals investing in Grade-A commercial spaces as part of their diversification strategy.

Volney currently manages three commercial buildings in Mumbai:

• Kanakia Boomerang, Chandivali
• Trade Centre, BKC
• Kanakia Wallstreet, Powai/Andheri

Industry Perspective

According to market observers, high-profile transactions — including Starlink’s recent Mumbai office deal and Saif Ali Khan’s purchase — indicate continued interest in established business districts. The deals highlight confidence in Mumbai’s commercial real estate market and its stable absorption levels.

Also Read: Elon Musk’s Starlink Satellite Has Inked Its First Major Real Estate Deal In India

The post Saif Ali Khan Buys ₹30.75 Crore Commercial Space in Andheri’s Kanakia Wallstreet After Starlink Deal appeared first on Square Feat India.

Mumbai, November 15, 2025: The 46th Knight Frank–NAREDCO Real Estate Sentiment Index for Q3 2025 (July–September) shows continued optimism across India’s property market, reinforcing the sector’s resilience amid global economic headwinds.

The Current Sentiment Score increased to 59, up from 56 in Q2 2025 — the highest level recorded this year — while the Future Sentiment Score held steady at 61, remaining firmly in the optimistic zone.

Stronger market fundamentals, robust office leasing, resilient high-ticket residential demand, stable interest rates, and improved liquidity have collectively boosted industry confidence.

Market Fundamentals Improve Across Segments

The positive sentiment is driven by:

• Stable interest rates and eased inflation
• Healthy domestic consumption
• Strong momentum in premium residential sales
• Deepening office leasing pipelines
• Consistent macroeconomic policy environment

Both developers and financial institutions reported growing confidence, reflecting broad-based improvement across the sector.

South Leads Optimism; North Shows a Strong Rebound

Sentiment remained optimistic across regions:

• South Zone: Highest score at 62, driven by strong leasing in Bengaluru and Hyderabad and robust demand for high-value homes.
• North Zone: Rose to 56, supported by steady office activity in NCR.
• East Zone: Slight moderation to 59 amid lower residential launches.
• West Zone: Dipped marginally to 59, though strong office absorption in Mumbai and Pune cushioned residential softness.

Developers Cautious, Non-Developers Steady in Confidence

• Developers’ sentiment: Moderated to 59 from 63 as they remain cautious due to elevated input costs and slower mid–low segment demand.
• Non-developers (banks, institutions, PE funds): Maintained stable optimism, recording a Future Sentiment Score of 61.

This alignment suggests market confidence anchored in liquidity, asset quality, and sustained formal-sector investment.

Residential Market: High-Ticket Demand Drives Optimism

Residential sentiment remained strong in Q3 2025:

• 71% expect launches to remain stable or increase
• 74% expect sales to stay stable or improve
• 92% expect prices to remain stable or rise

NCR, Bengaluru, and Hyderabad continued to lead price growth with 13%–19% YoY increases, driven by demand in upper-mid and premium categories.

Office Market: Strongest Performer Across Asset Classes

The office market displayed the highest level of optimism:

• Leasing: 55% expect an increase
• Supply: 38% expect growth, 40% expect stability
• Rents: 95% expect stability or upward movement

Limited Grade A supply, GCC expansion, IT-led demand, and growing pre-commitments continue to support sector strength.

Favourable Economic & Funding Environment

• 78% foresee stable or improved economic momentum
• 86% expect funding conditions to stay stable or get better

Easing inflation, strong fiscal spending, active capital deployment into premium housing, and the RBI’s accommodative stance are helping sustain market momentum.

Expert Commentary

Knight Frank India CMD Shishir Baijal said the sustained optimism “underscores the sector’s resilience and adaptability,” noting that steady demand in premium housing and a strong office pipeline continue to shape a positive outlook.

NAREDCO President Parveen Jain added that confidence remains supported by “policy continuity, stable demand, and healthy funding conditions,” especially in premium housing and office segments.

Conclusion

The Knight Frank–NAREDCO Sentiment Index for Q3 2025 reaffirms that India’s real estate sector remains on a solid growth trajectory. With inflation moderated, funding robust, and demand consistently strong across asset classes, the sector enters Q4 2025 with firm confidence and balanced growth expectations.

Also Read: Realty Stocks Close First Day of the Week on a Firm Note: DLF, Godrej, Lodha Lead Gains as Festive Tailwinds Persist

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Europe’s Mountain Market Defies Gravity

The Knight Frank Alpine Property Index shows prices climbing 3.3% year-on-year, with Switzerland’s Andermatt leading the charge at +14.6%, followed by Davos (+10.5%) and Cortina d’Ampezzo in Italy (+10%).

Interestingly, 73% of high-net-worth individuals (HNWIs) surveyed said they would now consider living full-time in the Alps, thanks to flexible work lifestyles and the desire for wellness and nature.

The Alps are also seeing strong sustainability momentum — nearly half of new buyers factor in climate resilience and eco-living before purchase. Meanwhile, resorts like Val Thorens, Val d’Isère, and Zermatt lead Knight Frank’s Alpine Sustainability Index.

What This Means for Indian Homebuyers

While most Indian investors aren’t rushing to buy a chalet in Switzerland, the Alpine trend offers valuable lessons for India’s evolving housing market.

1. Lifestyle is the new investment driver
Buyers are choosing homes that deliver year-round lifestyle value — not just investment yield. This mirrors the rising demand for wellness-driven, nature-based and second-home living in Indian locations like Lonavala, Alibaug, and Goa.

2. Premium homes outperform when supply is tight
A 23% price jump shows that limited-supply luxury real estate can deliver long-term resilience — even when global luxury markets slow down. For India, it highlights how niche segments like branded residences and hill-station homes may continue to outperform.

3. Regulations shape prices
Chamonix’s “one in, one out” housing rule has pushed up premiums on properties with development rights. India’s market too is seeing price impacts from tighter rules around FSI, redevelopment, and environmental clearances.

4. Younger buyers are shaping the market
Millennials account for a growing chunk of Alpine buyers — 80% said they would consider full-time mountain living. Similarly, in India, younger, remote-working professionals are increasingly driving demand for weekend homes and flexible-living options.

5. Entry-level opportunities exist even in prime zones
Despite the surge, nearly half of wealthy buyers still target homes under €2 million (around ₹18 crore). That’s a reminder that prime living need not always mean ultra-high-end — a trend visible in Indian micro-markets like Pune’s western suburbs or Dehradun’s premium gated villas.

The Big Picture for India

The Alps’ transformation from a seasonal playground into a year-round lifestyle destination reflects a larger global truth: people are buying homes for how they want to live, not just where they want to stay.

For India, this means the next decade’s real estate story could be less about metros and more about mountains, beaches, and wellness zones — driven by flexible living, remote work, and rising aspirations.

Also Read: Noida International Airport boosts real estate rates on Yamuna Expressway

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Mumbai, October 07, 2025 — India’s residential real estate market maintained steady growth in the third quarter of 2025, driven by strong demand for premium homes. According to Knight Frank India’s quarterly update, 87,603 housing units were sold across the top eight cities in Q3 2025 — a 1% year-on-year (YoY) increase, defying expectations of a slowdown.

Supply remained stable, with 88,655 new units launched, a marginal 2% YoY decline. Price growth persisted across all markets, underpinned by easing inflation, improved liquidity, and supportive macroeconomic conditions.

Inflation cooled to 2.07% in August 2025, down from 3.65% a year ago. The RBI’s FY 2026 GDP forecast was raised to 6.8%, and the repo rate stood 100 bps lower than end-2024 — factors that bolstered end-user confidence and homebuying sentiment.

City-wise Residential Sales Performance — Q3 2025

Mumbai led with 24,706 units sold, contributing 28% of total sales. Chennai stood out with 12% YoY growth, its highest post-pandemic performance. NCR and Bengaluru maintained steady volumes, while Pune was the only laggard with an 8% decline.

Premium Housing Emerges as Growth Driver

Premium housing continued its upward trajectory, marking a structural shift in buyer demand. Units priced below ₹1 crore saw their share of sales decline to 48% in Q3 2025 from 54% a year earlier. In contrast, sales of homes priced over ₹1 crore rose to 52%, growing 15% YoY.

The ₹1–2 crore segment accounted for 28% of total sales, making it the largest by volume. Ultra-luxury categories like ₹10–20 crore recorded a 170% surge YoY, albeit on a lower base.

Ticket-Size Segment Sales — Q3 2025

Gulam Zia, Senior Executive Director – Valuation, Advisory and Research, Knight Frank India, observed that premium housing has “decisively taken centre stage,” reflecting changing urban aspirations for larger, better-quality homes.

New Launches See Mixed Trends

New residential launches across the top eight markets dipped slightly by 2% YoY to 88,655 units. Growth was led by Chennai (+44%) and Bengaluru (+28%), while Mumbai and NCR saw sharp declines of 19% each, weighing on overall supply.

Price Growth Remains Broad-Based

Average residential prices rose across all markets in Q3 2025, led by NCR (+19%), followed by Bengaluru (+15%) and Hyderabad (+13%). Even with moderate sales growth, robust price appreciation points to sustained demand and limited immediate supply pressures.

Inventory Health Stays Stable

The Quarters to Sell (QTS) — a key indicator of market health — remained stable at 5.8 quarters, equivalent to less than 18 months of inventory. Unsold inventory rose 4% YoY to 506,400 units, but stable sales velocity over the past eight quarters indicates healthy absorption.

Notably, unsold inventory in higher ticket-size segments (above ₹2 crore) has risen faster than in the affordable categories, particularly in the ₹20–50 crore range where QTS stretched to 14.4 quarters, indicating slower absorption in ultra-luxury homes.

Market Outlook: Plateau Phase Likely Ahead

Shishir Baijal, Chairman & Managing Director, Knight Frank India, noted that India’s housing market is now in its fifth year of an upcycle, and the YoY growth rates are beginning to rationalise. He indicated the market may be entering a prolonged plateau phase, supported by stable macroeconomic conditions and evolving buyer preferences.

Financing innovations, subvention schemes, and fiscal incentives continue to channel demand toward higher-value segments, ensuring resilience even amid geopolitical uncertainties.

Also Read: Home Sales Up By 12% In India.

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Knight Frank’s Prime Global Rental Index Q2 2025 shows luxury rentals across 16 world cities grew by 3.5% year-on-year, signaling a modest recovery after last year’s slowdown. For Indian investors, cities like London, New York, Singapore, and Sydney continue to be prime targets due to their strong international demand and limited new supply.

Indian Affinity for Global Gateway Cities

Shishir Baijal, Chairman & MD, Knight Frank India, noted that Indian investors have consistently favored New York, London, and Singapore, calling them “stable long-term investment destinations.” Despite high global interest rates, constrained supply and resilient demand are keeping rental markets attractive for Indian buyers looking to diversify internationally.

Global Rental Market Leaders

• Hong Kong led the index with 8.6% annual rental growth, followed closely by Tokyo (8.3%).
• New York (6.9%) registered strong quarterly gains of 6.6%, highlighting its continued rebound.
• European hubs like Berlin (4.9%) and Frankfurt (4.7%) showed steady momentum.
• London (1.5%) and Singapore (1.5%) stayed resilient due to tight supply and steady overseas demand.

Long-Term Growth Trends

Over the last five years, Miami (+61%) and New York (+47%) have dominated prime rental growth, driven by post-pandemic migration and luxury demand. Sydney, Singapore, and London (+43% each) also posted strong increases, cementing their reputation as safe bets for global investors.

Outlook: Demand Outpaces Supply

While elevated interest rates and inflation continue to weigh on affordability, immigration-led demand and low construction pipelines are expected to keep rentals trending upwards. Knight Frank forecasts mid-single-digit growth for New York and Miami, while Hong Kong and Tokyo may moderate under regulatory pressure.

Also Read: Global Super-Prime Property Market Sees $9.43 Billion Surge in Q1 2025, Led by Dubai and South Florida

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The Current Sentiment Score dropped to 54 in Q1 2025 from 59 in Q4 2024. Similarly, the Future Sentiment Scoreeased to 56, reflecting a subtle but clear shift toward caution due to global economic volatility, regional tensions, and consumption softening. Despite this dip, both scores remain above 50 — indicating continued, albeit restrained, optimism.

Residential Market Sees Cooling Demand

The residential segment, particularly in the mid- and lower-ticket categories, is seeing signs of slowing demand:

• Only 22% of stakeholders expect residential sales to increase, a sharp decline from 73% in Q1 2024.
• 93% believe that prices will either remain stable or rise, although the share expecting actual price increases has dropped to 50%, down from 82% a year ago.
• New launches are also expected to slow, with only 28% of stakeholders anticipating growth in supply.

This reflects a shift toward pricing stability and recalibration of supply strategies, particularly in response to affordability concerns in the mass housing segment.

Office Sector Emerges as a Bright Spot

In contrast, the office segment continues to perform strongly:

• 82% of respondents expect office leasing volumes to increase or remain steady.
• 91% foresee stable or rising rental values, signaling strong occupier confidence.
• Although only 24% expect an increase in new office supply, high demand absorption is keeping the segment resilient.

Key demand drivers include Global Capability Centres (GCCs), IT services, and flex space operators, particularly in metro markets like Bengaluru, Hyderabad, and Pune.

Developers & Financial Institutions: A Cautious Stance

• The Developer Future Sentiment Score declined to 53, as developers adopt a more demand-led approach and focus on high-ticket projects.
• The Non-Developer Sentiment Score — which includes banks, financial institutions, and private equity funds — also fell slightly to 57, indicating a wait-and-watch approach on capital deployment.

Both groups remain selectively optimistic, especially about premium residential and commercial real estate, while being conservative about mass housing and speculative launches.

Macroeconomic Sentiment Dips Amid Global Headwinds

Economic expectations have softened:

• Only 55% of stakeholders believe the economic momentum will improve or stay the same — significantly down from 91% in Q1 2024.
• Global trade tensions and regional instability are contributing to uncertainty.

However, recent RBI repo rate cuts in February and April 2025 have improved liquidity and borrowing sentiment, with 79% of respondents expecting funding availability to improve or remain stable.

Industry Leaders Weigh In

Shishir Baijal, Chairman and Managing Director of Knight Frank India, commented:

“Q1 2025 marks a phase of strategic recalibration for the sector. Premium residential and commercial segments continue to display strength, underlining the industry’s long-term resilience.”

Hari Babu, President of NAREDCO, added:

“This marginal dip in sentiment is not a sign of decline, but of maturity. The industry is moving forward cautiously but confidently, adapting to shifting market dynamics.”

Conclusion

The Q1 2025 Sentiment Index highlights a sector at a crossroads — cautiously optimistic but highly strategic. While residential demand in the affordable and mid-income segments moderates, premium housing and commercial office spaces continue to drive the industry forward. With liquidity improving and developers adapting quickly, Indian real estate remains on stable ground despite external challenges.

Also Read: MahaRERA Becomes First in India to Cross 50,000 Housing Project Registrations

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