KING JOHNSON KOYYADA | Kolkata
India’s real estate sector is heading towards a potential $1 trillion market by 2030, with rising incomes, urbanisation, infrastructure spending and strong end-user demand driving the next phase of growth.
Hyderabad and Bengaluru are among the markets showing strong momentum, while luxury housing, office demand, REITs, and emerging Gen Z buyers are reshaping the sector. At the same time, high land costs and affordability remain major challenges.
Against this backdrop, ANAROCK Group Chairman Anuj Puri shares his outlook on the opportunities, challenges, and changing dynamics of Indian real estate.
Q. What are the key factors driving the growth of the Indian real estate sector? How much growth do you expect the sector to achieve over the next five years? Which cities are likely to see the highest growth?
A. Rising incomes, urbanisation, infrastructure spending, and strong end-user demand are the main drivers. Commercial leasing, warehousing, and data centres are adding to it.
ANAROCK research points to a market of about USD 1 trillion by 2030.
For city-level momentum, Hyderabad and Bengaluru posted the fastest annual sales growth in July–September, at 15% and 12%, while Mumbai Metropolitan Region remained the largest market.
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Q. Are foreign investments in Indian real estate likely to increase or decrease in the coming years? What kind of incentives or policy support does the central government need to provide to attract more foreign investment into the sector?
A. Foreign investment is likely to keep rising. Capital inflows into Indian real estate reached USD 5.1 billion in Q1 2026, up 72% year-on-year. In my view, this is analysis rather than published data, so investors would welcome predictable tax treatment, faster approvals, simpler repatriation and deeper exit routes through REITs.
The Union Budget 2026 already signalled support for REITs to unlock institutional capital for commercial real estate.
Q. Is the popularity of REITs increasing in India? Why have REITs not gained the same level of popularity in India as they have in some other countries? What kind of developments or assets should Indian developers create to attract more REIT investments?
A. Awareness is growing, but the market is still underpenetrated, as Anuj Puri has noted. As analysis shows, the main reasons are a short track record, a small number of listed trusts and a focus on offices.
Developers can attract REIT capital by building large, fully leased Grade A office parks with strong tenants. Data centres, logistics assets and well-run malls would also suit REIT investors.
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Q. How has demand for office space in India been over the last nine months? Which cities are seeing the strongest demand? What has been the office space absorption in different cities during this period?
A. Demand has been record-breaking. Industry estimates put nine-month absorption at 66.4 million sq ft, up 8% year-on-year.
ANAROCK Research's first-half data shows net absorption of 27.44 million sq ft. Bengaluru (10.8 million sq ft gross), Hyderabad (6.4 million) and Chennai (3.2 million) led.
In the third quarter, industry estimates show Hyderabad at 5.3 million sq ft, Bengaluru 4.9 million, Delhi-NCR 4.4 million, Mumbai 2.6 million, Chennai 1.9 million and Pune 1.4 million.
Q. Coming to the residential sector, recent surveys show that a large number of buyers are showing a preference for luxury homes. What are the main reasons behind this trend? Who are the major buyers of luxury homes in India?
A. Buyers are trading up for space and quality. The latest Anarock consumer sentiment survey found 48% of respondents prefer 3BHKs, and ₹90 lakh–1.5 crore is the most preferred bracket.
Homes above ₹1.5 crore made up 53% of new launches in Q1 2026. My reading, not published data, is that end-users upgrading from smaller homes and high-income professionals form the core of luxury demand. Overseas Indian buyers paused in early 2026.
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Q. Around 90% of India's population may have the financial capacity to buy affordable housing. If there is such a large potential market, why are developers still not building enough affordable homes? What are the major challenges preventing developers from focusing more on this segment?
A. Land economics is the main barrier. Anarock Research data shows affordable homes were just 6% of new launches in Q2 2026, down from nearly 52% in 2018.
The ratio of affordable launches to demand fell to 0.36 in 2025 from 1.05 in 2019. Land costs leave thin margins on low-priced homes. Capacity to pay and willingness of developers to build are therefore very different things.
Q. What kind of support or incentives should the central government provide to create greater demand for affordable housing in India? Would it be better to standardise the size of the home or flat, rather than focusing only on the price as the benchmark for affordable housing?
A. In my view, support should focus on land, approvals and finance: subsidised land, faster clearances and cheaper project funding. The government's affordable-housing price limit has not moved even as homes in this range now cost more than ₹45 lakh.
A size benchmark, such as a carpet-area cap, would work better alongside city-specific price bands than price alone, because land costs differ widely between cities.
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Q. Are Gen Z buyers coming forward to purchase homes in India? If so, what budget range are they generally looking at? Which cities are seeing the highest interest from Gen Z homebuyers?
A. Yes, younger buyers are coming forward. Reporting on the latest research says over half of Gen Z and millennials prioritise property ownership. For budgets, the broader buyer pool's most preferred bracket is ₹90 lakh–1.5 crore.
Younger first-time buyers likely sit towards the lower end of that range. Interest should be strongest in the biggest sales markets: Mumbai Metropolitan Region, Bengaluru and Hyderabad. That last point is my inference.
Q. The construction sector is one of the largest sources of employment in India after agriculture. What are the major challenges the construction and real estate sector is currently facing?
A. Affordability is the biggest pressure. The Anarock survey found 65% of respondents concerned about rising home prices. Average prices across the top seven cities rose 7% year-on-year in Q3, and available inventory rose 12% to about 6.31 lakh units.
Buyers are becoming more selective. Developers face high land costs and a shrinking affordable segment, and Q2 sales fell 6% year-on-year before recovering in Q3.
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Q. What is the current ground reality of the Hyderabad real estate market? How much office space is currently under construction in Hyderabad? On average, how much office space does Hyderabad absorb every year? How has office space absorption performed over the last nine months?
A. Hyderabad is active but supply-heavy. Housing sales rose 15% to about 12,970 units in Q3, while new launches jumped 120% to 18,950 units. On offices, ANAROCK data shows roughly 36 million sq ft of upcoming supply on about 125 million sq ft of stock.
Net absorption was 8.5 million sq ft in 2025 and 5.2 million in the first half of 2026. Adding industry estimates of 5.3 million sq ft for July–September gives roughly 10 million sq ft for nine months.
Q. It is well known that Hyderabad has one of the highest concentrations of skyscraper projects in India after Mumbai. How have sales of apartments in these high-rise projects performed over the last nine months? What strategies should developers adopt to increase sales in skyscraper projects? What should they do to attract more buyers to high-rise homes?
A. Citywide sales suggest steady demand: about 12,400 units in Q1 and 12,970 in Q3.
High-rise sales are likely to have tracked that trend, though that is my inference. Unsold stock of 108,700 homes at the end of Q2 means buyers have plenty of choice.
As an analysis, developers should price in line with the local market and phase deliveries. Clear handover timelines and transparent maintenance costs would also help, as would visible safety and amenity standards.
A strong delivery record will
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