Real Estate 2025: A Year of Stabilisation and Strategic Growth

By Vansh Kataria

After the remarkable achievements of 2024, where residential prices in the top seven cities surged by 21 per cent year-on-year, 2025 promises a shift towards stabilisation and strategic expansion. As the sector recalibrates following a period of rapid growth, its trajectory will be shaped by moderated price hikes, a robust pipeline of new projects, and the enduring appeal of luxury and sustainable developments.

The last year was a year of milestones for Indian real estate. The demand for luxury homes increased massively, driven by affluent domestic buyers and a significant influx of interest from non-resident Indians (NRIs). Branded residences also gained prominence, offering exclusivity and state-of-the-art amenities that appealed to high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs). Cities like Mumbai and Gurugram emerged as key players, with areas such as Dwarka Expressway and SPR witnessing 88 per cent of luxury project launches in Delhi-NCR.

Unlike 2024, this year is likely to be a year of stabilisation. While demand remains robust, average residential price hikes are expected to temper, aligning with input costs and market dynamics. Developers are also preparing to introduce significant new inventory, particularly from listed players with strong balance sheets. This steady infusion of supply will provide homebuyers with diverse options while ensuring sustainable growth in the sector.

The focus on sustainability and smart homes will remain central to market trends in 2025. Green projects have already gained traction, catering to environmentally conscious buyers who value energy-efficient designs and eco-friendly construction. Simultaneously, advancements in home automation and artificial intelligence are transforming properties into smarter, more intuitive living spaces. These innovations resonate with modern buyers who seek homes that enhance their lifestyle while aligning with global sustainability goals.

Economic stability will play a pivotal role in shaping the sector’s fortunes. In 2024, real estate contributed around 7 per cent of India’s GDP, and this figure is projected to rise to 13 per cent in 2025. Long-term forecasts suggest that the market size will grow from $300 billion in 2024 to $1 trillion by 2030, ultimately reaching $4.8 trillion by 2047. These projections reflect the sector’s integral role in India’s journey toward becoming a $26 trillion economy by its centenary of independence.

Real estate also continues to attract significant investment, emerging as a preferred asset class for Alternative Investment Funds (AIF). Data from SEBI shows that ₹75,468 crore was invested in real estate in the first half of FY 2025, underscoring investor confidence in the sector’s potential. This influx of capital will further bolster growth, particularly in segments like luxury, commercial real estate, and emerging markets in smaller cities.

The road ahead, however, is not without challenges. The sector must navigate global headwinds, including geopolitical tensions, and adapt to evolving buyer preferences. Much also depends on government policies, with the upcoming Union Budget holding the potential to catalyse further growth through supportive measures and incentives.

As 2025 unfolds, the Indian real estate sector is poised to balance stability with innovation. Developers will need to focus on creating value-driven projects that meet the aspirations of a diverse buyer base. By embracing sustainability, leveraging technology, and tapping into the potential of smaller cities, the sector can not only sustain its momentum but also redefine its growth path.

This year is expected not just a year of stabilisation but also a bridge to the future—a period where real estate will lay the foundation for its long-term role as a cornerstone of India’s economic and social progress. For investors, buyers, and developers alike, the opportunities are vast, and the outlook is undeniably positive.

The author is Co-founder of Tirasya Estates