The Indian real estate market sector is a fascinating mix of robust long-term potential and dynamic short-term adjustments. As we move through 2026, the market is showcasing distinct trends, from a strong tilt towards luxury homes to unprecedented institutional investments, all underpinned by the critical framework of the Real Estate (Regulation and Development) Act (RERA).
The Residential Landscape: A Tale of Two Halves
While recent data (Q4 2025) showed a 16% Year-over-Year (YoY) dip in housing sales across India’s top 9 cities, this isn’t a sign of fundamental weakness. Instead, it suggests a market pause as buyers become more discerning. Notably, Navi Mumbai and Delhi-NCR bucked the trend, showing continued growth.
The big story here is premiumization. Even with a moderation in unit volumes, the total value of new launches soared, indicating a strong shift towards luxury and high-end properties (above ₹1 crore). This segment continues to command strong demand and price appreciation, driven by genuine end-users seeking quality and lifestyle upgrades.
Furthermore, housing affordability has seen a positive shift, partly due to the RBI’s cumulative rate cuts. Mumbai, in particular, celebrated a significant milestone with its EMI-to-income ratio dropping below the 50% threshold for the first time – a welcome relief for prospective homeowners. Meanwhile, Ahmedabad and Pune continue to stand out as the most affordable major housing markets.
REITs: A New Global Player
India’s Real Estate Investment Trusts (REITs) are also making global waves, now boasting a Gross Asset Value (GAV) that surpasses that of Hong Kong’s REIT market. A significant SEBI reclassification, effective from January 1, 2026, will treat REIT units as equity-related instruments, further integrating them into the broader financial ecosystem and attracting more mutual fund participation.
The office market remains robust, with gross absorption expected to exceed 80 million square feet in 2025, largely driven by multinational corporations and Global Capability Centres (GCCs). The retail sector is also experiencing a strong revival, poised to lease over 9 million square feet this year, fueled by new Grade A mall completions and surging demand from fashion, F&B, and entertainment brands.
The Indispensable Role of RERA: Ensuring Transparency and Trust
Amidst all these exciting developments, one policy stands out as a foundational pillar of trust and growth: the Real Estate (Regulation and Development) Act, 2016, or RERA.
Before RERA, the Indian real estate market was often characterized by a lack of regulation, leading to delays, diversions of funds, and a significant power imbalance favoring developers. RERA changed this by:
Enhancing Transparency: It mandates that all projects be registered, and developers must provide detailed information about the project, including layouts, government approvals, and timelines. This makes it easier for buyers to make informed decisions.
- Ensuring Accountability: RERA holds developers accountable for timely completion and delivery. It requires them to deposit 70% of the funds collected from buyers into a separate escrow account, preventing diversion of funds to other projects.
- Protecting Buyer Interests: The Act establishes a robust grievance redressal mechanism, ensuring that buyers have a legal recourse in case of disputes. It also stipulates compensation for delays and penalizes non-compliance.
- Boosting Investor Confidence (especially for NRIs): With clearer rules and greater protection, RERA has significantly boosted confidence among both domestic and Non-Resident Indian (NRI) investors, making the market more attractive and reliable.
The impact of RERA cannot be overstated. It has professionalized the industry, fostered a sense of trust, and created a more equitable playing field for homebuyers and developers alike.
The Road Ahead: A Positive Outlook
Looking to 2026, the sentiment remains largely positive. The market is expected to stabilize and regain momentum, supported by strong economic fundamentals and ongoing infrastructure development. With nearly 70% of developers anticipating a rise in home prices by over 5%, the Indian real estate story is one of sustained growth, strategic evolution, and increasing maturity.
As the market continues its journey of premiumization and expansion, the foundational strength provided by RERA will remain crucial, ensuring that this growth is built on transparency, accountability, and ultimately, buyer confidence.