India's Property Market Sentiment Improves in Q4 2025, Enters 2026 on Steady Ground
India's property market sentiment improved in Q4 2025 with Current Sentiment Score rising to 60 from 59 in Q3, while Future Sentiment Score held steady at 61, both in optimistic territory. Strong GDP growth of 8.2% in Q2 FY2025-26 versus 5.6% year-earlier, along with 50% of respondents reporting better funding availability, drove market confidence. All regions remained optimistic with South, East and West zones scoring 62 each, while North Zone recovered to 59, supported by office leasing strength and infrastructure momentum.
*this image is generated using AI for illustrative purposes only.
India's property market demonstrated resilient sentiment as 2025 concluded, with key indicators showing steady improvement and positive outlook for 2026, according to the latest Knight Frank-NAREDCO report released Monday. The comprehensive survey reflects growing confidence among market stakeholders, supported by stronger economic fundamentals and improved funding conditions.
Sentiment Scores Show Steady Progress
The property market's momentum gained traction in the final quarter of 2025, with measurable improvements across key sentiment indicators:
| Metric | Q4 2025 | Q3 2025 | Status |
|---|---|---|---|
| Current Sentiment Score | 60 | 59 | Optimistic Zone |
| Future Sentiment Score | 61 | 61 | Optimistic Zone |
Both scores remained firmly within the optimistic zone, indicating sustained confidence among industry participants despite global economic uncertainties.
Economic Fundamentals Drive Market Confidence
Strong macroeconomic performance emerged as a primary confidence driver, with GDP growth significantly outpacing previous year levels. The economy demonstrated robust momentum in Q2 FY2025-26, recording growth of 8.2% compared to 5.6% in the corresponding period of the previous year.
Survey respondents highlighted improving market conditions across multiple parameters:
- 52% of respondents reported improving economic momentum
- 50% indicated enhanced funding availability
- Easing inflation supporting market stability
- Accommodative monetary conditions strengthening growth visibility
"High-frequency indicators continue to point to sustained economic momentum, helping offset global uncertainty and supporting real estate fundamentals," said Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India.
Regional Performance and Sector Dynamics
All surveyed regions maintained optimistic sentiment, though with varying degrees of strength. The geographical distribution of sentiment scores revealed consistent positive outlook across India's major property markets:
| Region | Q4 2025 Score | Key Drivers |
|---|---|---|
| South Zone | 62 | Strong office leasing in Bengaluru, Hyderabad |
| East Zone | 62 | Steady housing demand in higher segments |
| West Zone | 62 | Mid-segment residential growth |
| North Zone | 59 | Recovering from earlier softness |
The North Zone's recovery to 59 points marked a notable turnaround from previous quarters' softness, supported by steady office sector traction and ongoing infrastructure development momentum.
Sector-Specific Trends and Institutional Confidence
Residential markets benefited from sustained demand in higher ticket size segments, supported by calibrated supply management. The office sector continued its strong performance trajectory, underpinned by robust leasing activity and firm rental levels across major markets.
Institutional stakeholders demonstrated particularly strong confidence, with banks, financial institutions, and private equity funds recording a Future Sentiment Score of 63. This elevated score reflects rising confidence in asset quality and improving liquidity conditions within the real estate sector.
The report emphasized that despite sentiment levels remaining below 2023-24 peaks, the combination of resilient office demand, improving liquidity conditions, and stable domestic economic environment supports positive market expectations. Continued public capital expenditure and accommodative policy measures have further strengthened the foundation for sustained growth in India's property market as it enters 2026.
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