Indian Real Estate Industry

Government Initiatives

Government of India along with the governments of respective States has taken several initiatives to encourage development in the sector. The Smart City Project, with a plan to build 100 smart cities, is a prime opportunity for real estate companies. Below are some of the other major Government initiatives:

• The Union Budget 2025-26 allocated Rs. 1 lakh crore (US$ 11.35 billion) to the Urban Challenge Fund, aiming to transform cities into growth hubs through redevelopment and infrastructure projects.
• In the Union Budget 2024-25, under PM Awas Yojana Urban 2.0, housing needs for one crore urban poor and middle-class families will be met with a Rs. 10 lakh crore (US$ 120.16 billion) investment, including Rs. 2.2 lakh crore (US$ 26.44 billion) in central assistance over the next 5 years.
• The Reserve Bank of India cut the repo rate by 50 basis points in June 2025, significantly reducing home loan EMIs and boosting real estate demand and buyer confidence.
• Maharashtra Housing Policy 2025 focuses on affordable housing with a target of constructing 35 lakh houses in five years, emphasizing EWS and low-income groups while mobilizing Rs. 70,000 crore (US$ 7.95 billion) investment. It supports redevelopment, slum transformation via PPP, and inclusive housing for vulnerable groups.
• India’s full land digitization, set for completion by December 2025, is expected to boost FDI by easing acquisitions, enhancing transparency, and reducing disputes. Institutional real estate investments touched US$ 3.3 billion in H1 2025, with a sharp Q2 surge led by foreign investors.
• Construction is one of the largest sector in terms of FDI inflow. FDI in the sector Construction Activities stood at Rs. 323,987 crore (US$ 36.85 billion) and Construction Development stood at Rs. 239,261 crore (US$ 27.21 billion) from April 2000-June 2025.
• The Registration Bill 2025 closely related to land and property transactions, seeks to digitize and centralize land and property records, enabling online, paperless registration with Aadhaar-based verification. It aims to boost transparency, curb fraud, and make remote real estate transactions easier for both NRIs and domestic buyers.
• India’s REITs crossed Rs. 1 lakh crore (US$ 11.36 billion) in market capitalization by July 2025, reflecting strong investor confidence. The four listed REITs - Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT and Nexus Select Trust, cover over 128 million sq ft of top-grade office and retail space in major cities.
• India’s REIT market is set for rapid growth, with projections of 25-30% penetration in the office segment by 2030 and at least one new REIT expected to launch each year over the next 3-5 years.
• The government has set up the SWAMIH Special Window Fund, with Rs. 15,000 crore (US$ 1.70 billion) allocated in Budget 2025 for its second phase. The fund focuses on completing stalled affordable and mid-income housing projects, offering relief to homebuyers and driving project completion through blended finance from government, banks, and private investors.
• Mumbai’s stamp duty collections in May 2025 rose 3% to Rs. 1,062 crore (US$ 121 million) from Rs. 1,034 crore (US$ 117 million) a year ago, supported by strong demand in properties above Rs. 5 crore (US$ 567,988). Year-to-date registrations grew 24% with stamp duty revenue up 17% at Rs. 5,696 crore (US$ 647 million).
• GST reforms help reduce tax burdens, especially for affordable housing under construction, with GST rates reduced to 1%, promoting affordable housing growth and easing costs for buyers.
• The new tax regime brings clarity and benefits for real estate owners, allowing a 30% standard deduction after municipal taxes, deduction of pre-construction interest on both self-occupied and rented properties, relaxed TDS limits on rental income, and the option to treat two self-occupied homes as tax-free.
• The premium segment grew strongly, with homes priced above Rs. 1 crore (US$ 113,598) cornering about 62% of the market share in H1 2025, reflecting rising buyer affluence and demand for luxury living.
• Under-construction premium homes witnessed price increases up to 44% YoY in H1 2025, with Mumbai leading at 44%, followed by Bengaluru (35%) and Gurugram (33%).
• India has over 7,000 IGBC-certified projects covering 1,370 million square feet, making it the third-largest market for LEED globally. The green building sector is expected to reach US$ 39 billion by 2025, offering 30-50% energy savings, 20-30% water savings, and higher rental and market value premiums.
• Q2 2025: PE investments surged to US$ 1.6 billion (Rs. 13,710 crore), doubling QoQ (Savills)
• H1 2025: PE inflows stood at US$ 2.4 billion (Rs. 20,566 crore), up 38% YoY (Savills)
• Q2 2025 saw strong retail and infrastructure investments with Blackstone investing Rs. 3,239 crore (US$ 378 million) in South City Mall, Kolkata, the largest retail deal of the quarter, while Sumitomo and Brookfield invested Rs. 2,528 crore (US$ 295 million) and Rs. 1,294 crore (US$ 151 million) respectively in MMRDA assets.
• In FY25 exports from SEZs reached US$ 172.27 billion, with 276 operational SEZs.
• The co-working and flex space segment is rapidly expanding, with operators leasing about 6.5 million sq ft of managed and flexible office space in top seven cities in H1 2025, marking a 48% YoY growth. This growth is driven by corporate demand for flexible, scalable, and cost-effective office solutions.
• The luxury real estate market in Delhi NCR surged in H1 2025, with branded residencies dominating and prices appreciating by around 9% YoY.
• In FY25, the Indian real estate sector delivered approximately 406,889 homes in the top nine major cities, marking a 33% increase from 306,600 units in FY24.
• In order to revive around 1,600 stalled housing projects across top cities in the country, the Union Cabinet approved the setting up of Rs. 25,000 crore (US$ 3.58 billion) alternative investment fund (AIF).
• Government created an Affordable Housing Fund (AHF) in the National Housing Bank (NHB) with an initial corpus of Rs. 10,000 crore (US$ 1.43 billion) using priority sector lending short fall of banks/financial institutions for micro financing of the HFCs.