Leasing momentum in Bengaluru, backed by steady activity in Hyderabad, helped the South Zone retain the strongest outlook in the Knight Frank–NAREDCO Real Estate Sentiment Index for Q3 2025 (July–September). The region posted a Future Sentiment Score of 62, even with a slight moderation, further supported by continued demand in high-ticket housing.
The sentiment index measures the confidence levels of key stakeholders in India’s real estate sector, indicating optimism when the score is above 50, neutrality at 50 and pessimism below 50.
The North Zone continued its recovery, inching up to 56 on the back of steady office activity in NCR. The East Zone eased to 59 due to moderated residential launches in the first three quarters of 2025 compared with the same period in 2024. The West Zone dipped from 61 to 59, as robust office absorption in Mumbai and Pune balanced a more measured residential performance.
Overall Sentiment Holds Firm
The Current Sentiment Score rose to 59 in Q3 2025 from 56 in the previous quarter, marking the highest level recorded this year. The Future Sentiment Score remained stable at 61.
Knight Frank noted that the improvement reflects healthy market fundamentals, including resilient office leasing, strong demand in premium residential categories, stable interest rates, easing inflation and consistent liquidity conditions. These factors supported confidence among both developers and non-developers.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “Demand in the premium residential segment remains healthy, while the office market continues to demonstrate structural depth with strong leasing pipelines. Stable interest rates, easing inflation, and improved liquidity have reinforced overall sentiment. As we approach 2026, we expect the market to maintain steady momentum across asset classes.”
Meanwhile, developer sentiment eased from 63 to 59, shaped by elevated input costs and slower movement in mid to low ticket housing. Non-developers, such as banks, financial institutions and private equity funds, maintained optimism, with a Future Sentiment Score of 61. This alignment between measured developer sentiment and steady non-developer confidence reflects a market supported by liquidity and asset quality.
Residential Outlook Strengthens
Residential sentiment continued to improve. About 71 percent of respondents expect new launches to remain stable or increase, compared with 70 percent in Q2 2025. Optimism around sales also rose, with 74 percent expecting sales to remain stable or improve, up from 52 percent in Q2 2025. This was aided by rate cuts, subvention schemes and buyer-focused incentives.
Price expectations remained firm, with 92 percent of respondents anticipating stability or increases. NCR, Bengaluru and Hyderabad reported year-on-year price growth of 13 percent to 19 percent in Q3 2025, supported by strong demand in high and upper-mid ticket housing.
Office Market Remains Strongest Asset Class
The office segment continued to exhibit high confidence. Respondents showed strong expectations for leasing activity to increase or remain stable over the next six months. About 78 percent expect supply to remain stable or see moderate growth. Meanwhile, 95 percent expect rents to stay stable or rise, supported by limited Grade A availability, continued leasing momentum and increasing pre-commitments.
GCC expansion, IT-driven demand and the rise of flex-space contributed to this positive outlook.
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