Mumbai, July 29 India’s real estate stakeholders appear to be responding positively to improving macroeconomic indicators, a report said on Tuesday, as the Sentiment Index rose to 56 in April-June period (Q2) from 54 in Q1 this year, snapping a four-quarter downward streak.
The ‘Future Sentiment Score’ also climbed to 61 in the quarter from 56 a quarter ago, signalling a renewed sense of confidence and cautious optimism about the sector’s performance in the next six months, according to the Knight Frank-NAREDCO ‘Real Estate Sentiment Index for Q2 2025 (April-June).’
This marks a significant shift in the mood of the Indian real estate sector. Following a year-long moderation in sentiment, stakeholders are beginning to look beyond short-term global uncertainties and are anchoring their expectations on India’s structural economic strength, accommodative monetary policy, and robust demand in premium residential and office segments.
“Q2 2025 represents a turning point for the real estate industry with the recovery in both current and future sentiment scores reflects the sector’s resilience and adaptability. As high-frequency indicators show sustained momentum, stakeholders are repositioning their strategies for long-term growth, especially in premium and high-yielding asset classes,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
One of the most encouraging signs in this quarter’s index is the resurgence in developer confidence. The sentiment among developers has seen a sharp increase, with their Future Sentiment Score rising from 53 in Q1 to 63 in Q2 2025.
This change is largely attributable to easing financing conditions, falling borrowing costs following a 100-BPS cumulative repo rate cut by the Reserve Bank of India in H1 2025, and a visible pick-up in high-ticket residential demand.
Notably, non-developer stakeholders, which include banks, NBFCs, and private equity funds, have also reported a more positive sentiment this quarter, the report mentioned.
Geographically, the rebound in sentiment is visible across all four regions of the country. The north zone, which had hit a post-COVID low of 48 in Q1 2025, recovered to a score of 55 in Q2 2025, buoyed by improving infrastructure connectivity, a resurgence in demand in Delhi-NCR, and a shift in developer focus toward premium inventory.
The West zone saw an increase from 58 to 61, underpinned by continued strength in markets like Mumbai and Pune, which are seeing a consolidation of residential supply and sustained demand for office space. The South zone emerged as the strongest performer with a score of 63, up from 58, thanks to the commercial resilience of Bengaluru and Hyderabad and rising demand for lifestyle-led homes in key micro-markets.
Meanwhile, the East zone held steady at 61, with Kolkata’s residential segment showing consistent mid-market activity and buyer confidence, the report mentioned.
The premium and luxury categories, particularly those priced above Rs 1 crore, continue to perform well. Developers are showing strategic maturity by focusing on select high-performing micro-markets. The sentiment around residential pricing is notably strong. In Q2 2025, 94 per cent of stakeholders expected prices to remain stable or increase at par with the previous quarter.
“This recovery is led by steady office leasing — particularly by GCCs and flex operators — and strong demand for premium housing. Regionally, sentiment has picked up across the board, with the South leading at 63,” said Hari Babu, President, NAREDCO.
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