After years of stagnation, Indian real estate is showing strong signs of recovery in 2025. Rising demand, supportive government policies, and renewed investor confidence are reshaping residential, commercial, and logistics property markets. This recovery phase is also redefining how real estate valuation in india and investment decisions are approached across India.
The recent surge in demand for commercial and residential properties has resulted in a significant growth trend in the real estate industry in India after a long time. So many new investment opportunities like logistic warehouses and data centres are emerging every day from the lower echelons of the trade.
India is just one name in a long list of countries like the United States of America (USA) and the United Arab Emirates (UAE) that have witnessed a similar increase in the demand for real estate options worldwide. However, there has been a radical change in the perception of real estate as an investment option in our country. The ones who used to ask, “Why to invest in India?” are now asking, “Why not invest in India?”
India’s real estate sector is recovering due to rising demand, infrastructure spending, and policy support. This recovery is directly influencing property valuation for Insurance , investment strategies, and long-term risk assessment across residential and commercial markets.
Indian Real Estate Recovery in 2025: What’s Driving the Market
After a prolonged slowdown, Indian real estate is entering a structurally stronger growth phase in 2025. Demand is being driven by urbanisation, infrastructure expansion, improved credit availability, and rising investor confidence across residential, commercial, and logistics segments.
The emergence of data centres, warehousing hubs, and mixed-use developments has diversified the market beyond traditional housing. At the same time, regulatory clarity and formalisation have strengthened transparency, making real estate a more predictable investment asset class.
How Real Estate Recovery Impacts Property Valuation
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Rising demand improves fair market value across key micro-markets
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Infrastructure growth increases location-based valuation premiums
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Commercial leasing stability strengthens income-based valuations
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Policy clarity reduces risk discounts in valuation models
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Long-term recovery supports sustainable asset appreciation
Evaluating The Current Market Trend
Looking at the recent market trends, we can easily say that the realty industry has touched an inflexion point and can be predicted to achieve explosive growth soon. The tremendous rise in demand among all the subsectors of this industry can be observed in the residential real estate sector. However, a gradual increase in property prices can be seen all across the board.
Government Initiatives and Their Effect
To cope with the sudden rise in demand for real estate across the country, the Government of India went into swift action. They provided strong policy support to drive widespread consumer interest with last-stage funding mechanisms for near-completion housing projects, property registration fee and stamp duty cutbacks, and attractive incentives, schemes, and payment plans offered by real estate developers.
The drop in loan interest rates also helped sweeten the deal, resulting in a significant surge in consumer engagement across all essential real estate sectors. Additionally, so many favourable factors encouraged potential leads into homebuyers and significantly improved the sales outlook.
The sudden boom has encouraged even the real estate investment giants like Radhakishan Damani, the proprietor of DMart, on an extensive realty buying spree.
Irrespective of the developmental boom in the real estate sector, many other industry sectors in India witnessed some pretty high attrition rates in the April to June months of 2021. We’ve mentioned the various attrition rates in the respective sectors as follows:
- Information Technology Industry – 8.03%
- Education & Training Industry – 7.45%
- Knowledge Process Outsourcing – 7.38%
Therefore, most companies have resorted to doling out an average pay hike of 10-15% throughout their corporate hierarchy to increase employee retention rates. With so many handsome salary raises going out this year, the growth of the real estate market is bound to rise as we move forward not only because of the pent up demands but also due to some fundamental changes in the way young Indians perceive their life in the future.
Additionally, another factor that has helped boost the demand for residential real estate beyond imagination is the vast number of people trying to move up the realty ladder. Those living in rental homes aspire to become first-time homebuyers while existing homeowners shift to larger living spaces or acquire a second home in a different location. It has resulted in a significant demand boost for better housing options in urban centres like Delhi NCR, Mumbai Metropolitan Region, Bengaluru, Chennai, Pune, Ahmedabad, Hyderabad.
Investment and Developmental Opportunities
The Government of India (GoI) has undertaken various strategic measures in the Financial Budgets presented in the last seven years to drive sales in the realty industry. With the recent approval of the Real Estate Investment Trust (REIT) platform by the Securities and Exchange Board of India (SEBI), the Indian real estate market is expected to create investment opportunities worth Rs. 1.25 lakh crores ($19.65 Billion) shortly.
The Smart City Project launched by GoI, aimed at developing more than a hundred smart cities in India, is also a prime opportunity to grow real estate entities. Under the ambitious Pradhan Mantri Awas Yojana (PMAY) formulated by the Union Ministry of Housing and Urban Affairs, the residential real estate sector will get a further boost from the central government’s objective to provide twenty million affordable housing options in all major urban cities all over the country by 2022.
Furthermore, the projected growth in housing units near major urban centres will also boost the demand for commercial and corporate real estate. Hence, the real estate industry in India, which was standing stale at around $120 billion in 2017, is anticipated to achieve a market size of $1 trillion by 2030, with almost 13% contribution to our country’s GDP by 2025.
Paving The Road Ahead
A significant increase in the flow of Foreign Direct Investment (FDI) in the Indian real estate market and the Real Estate Regulatory Act (RERA) will also help increase transparency throughout the industry. In conclusion, the projected recovery of the real estate market in India has brought about some remarkable changes in how the housing finance sector functioned in the pre-COVID era, thus presenting incredible opportunities for both buyers and investors at the same time.
FAQS
1. Is Indian real estate really recovering in 2025?
Yes. In 2025, demand across residential, commercial, and logistics segments is improving due to infrastructure growth, better financing access, and stronger buyer and investor confidence.
2. Which real estate segments are growing fastest in 2025?
Residential demand remains strong, while logistics warehousing and data centres are expanding rapidly due to e-commerce growth and increased digital infrastructure investments.
3. How does real estate recovery affect property valuation?
Recovery typically raises fair market value in high-demand locations, improves income-based valuations in commercial assets, and reduces risk discounts when market visibility and policy stability improve.
4. What factors influence real estate prices and valuations in 2025?
Key factors include location and infrastructure, demand-supply balance, interest rates, rental yields, developer credibility, and regulatory clarity (such as RERA compliance).
5. How often should property valuation be updated in a changing market?
For active investment decisions or lending/insurance needs, valuation should be updated every 1–3 years, and immediately after major renovations, expansions, or significant market shifts.
Conclusion
India’s real estate sector is entering a structurally stronger phase in 2025, supported by rising demand, infrastructure development, and improved policy clarity. As residential, commercial, and logistics markets evolve, understanding the broader recovery cycle becomes essential for investors, developers, and asset owners.
More importantly, real estate recovery is closely linked to valuation outcomes. Market sentiment, location dynamics, income stability, and risk perception all influence how properties are valued during growth phases. Staying informed about these factors helps ensure more accurate assessment, better investment decisions, and long-term value preservation in a changing real estate landscape.
Real estate recovery often brings valuation challenges and opportunities.
Knowing how valuation responds to market cycles is essential for long-term investment planning.
About the author:
Sahil Narula
Sahil Narula is the Managing Partner at RNC Valuecon LLP and a Registered Valuer with IBBI. He brings over a decade of experience in Valuation Services, Corporate Finance, and Advisory, having led numerous complex assignments under the Insolvency & Bankruptcy Code, 2016, Mergers & Acquisitions, Insurance, and Financial Reporting.
He is a regular speaker at national forums (ASSOCHAM, CII, ICAI, IBBI, Legal Era) and currently serves as Co-Chairman of ASSOCHAM’s National Council on Insolvency & Valuations and a member of CII’s Task Force on Insolvency & Bankruptcy.
🤝Connect with Sahil on LinkedIn.