India’s luxury real estate boom drives record prices and investor confidence in 2026
The Indian real estate market is set for continued strength in 2026, building on steady growth seen in 2025. Demand for luxury homes and office spaces has driven activity, while new ownership models attract younger buyers. Analysts highlight stability, rising prices, and strong rental yields as key factors supporting the sector’s performance.
In 2025, residential prices climbed across major cities, with Delhi-NCR seeing increases of 7-8% and Mumbai around 5%. Bengaluru followed closely at 7%, pushed by strong demand in the luxury segment. High-end units priced above INR 10 million accounted for half of all sales, while the INR 200-500 million bracket grew by 70% in the first nine months of the year.
Office demand also stayed robust, with transaction volumes hitting 66.7 million sq ft. Rents rose by an average of 8%, with Mumbai’s Bandra Kurla Complex recording a 14% jump. Commercial properties offered yields of 6-7%, reinforcing their appeal as income-generating assets.
Fractional ownership models, such as REITs, gained traction, particularly among Gen Z buyers. These options provide lower entry costs, liquidity, and digital access—qualities that align with younger investors’ preferences. Meanwhile, macroeconomic conditions, including lower inflation and favourable lending rates, further supported market confidence.
While luxury housing led growth, mid-income segments lagged due to limited supply. Experts suggest a potential rebound if developers and policymakers prioritise affordability and expand inventory.
The outlook for 2026 remains positive, with luxury housing expected to keep expanding as buyers seek larger, premium homes. Institutional demand and rising rental income continue to underpin real estate as a stable, yield-focused asset class. Economic growth and foreign investment are likely to sustain the sector’s upward trajectory in the coming year.
