Real Estate Outlook 2026: Where are the best property investment opportunities? Experts weigh in

India’s real estate market is entering 2026 with a solid foundation laid by strong end-user demand, better developer practices and continuous infrastructure investments. After a year of strong momentum in 2025, the industry specialists, however, suggest a mixed outlook for the coming year—pointing out both the bright sides and the risks that are gradually emerging in both the residential and commercial sectors.

As per the industry estimates, the sale of houses in the top eight cities surpassed five lakhs in 2025, clearly indicating a trend where the buyers are the end-users rather than investors who buy for speculation. The residential sector experienced an increasing proportion of mid and premium segments, and the prices in this category went up by 6–10 per cent.

The commercial real estate segment also remained resilient, with office leasing touching 65–70 million square feet, driven primarily by IT firms, Global Capability Centres (GCCs) and flexible workspace operators.

Institutional interest stayed strong, with global funds increasingly favouring Indian real estate. Investments in 2026 are estimated at $6–7 billion, largely directed toward office assets, warehousing and data centres.

At the city level, growth is no longer confined to traditional markets like Mumbai, Delhi-NCR and Bengaluru. Tier-II cities such as Lucknow, Indore, Coimbatore and Jaipur are seeing 20–25 per cent demand growth, supported by expressways, metro connectivity and infrastructure-led development that has helped sustain property values.

Developers, too, appear more cautious than in the past. New launches are largely controlled, with an increased focus on completing under-construction projects and ensuring timely delivery—a critical factor in rebuilding buyer confidence.

Rakesh Bohra, Chief Operating Officer at Pioneer Urban Land and Infrastructure Limited, said that timely project delivery has become non-negotiable for developers.

According to him, the challenges developers faced earlier have largely been addressed through improved processes. In 2026, there will be launches because end-user demand remains steady, but the market will see better consolidation, less speculation and a stronger focus on well-designed projects with essential amenities.

Bohra added that rising land, construction material and labour costs—especially due to new labour codes—mean developers can absorb price pressures only to a limited extent, and some cost burden will inevitably be passed on to buyers.

Not all experts share an optimistic view. Ravi Sinha, CEO of Track2Reality, cautioned that headline sales numbers may mask deeper structural issues.

Transactions are largely happening in the luxury and super-luxury segments, while affordable and mid-income housing remains weak. Many investors are stuck, with exits becoming difficult, which itself signals risk, Sinha said.

In tier-II cities, he warned that demand must be evaluated alongside job creation, purchasing power and local economic growth. He also flagged potential risks in commercial real estate, particularly GCCs, which remain sensitive to Indo-American trade dynamics and global hiring policies.

Logistics growth depends on consumption, and consumption is not rising fast enough. 2026 needs to be approached very carefully, and we could even see early signs of a bubble correction, he added.

Property expert Pradeep Mishra pointed to signs of oversupply in select markets, which could trigger a 5–10 per cent price correction. Demand for high-priced homes appears to be weakening, while affordable housing supply remains inadequate despite strong demand.

“Office space vacancies are close to 20 per cent. In residential real estate, I expect around 5 per cent growth in 2026, largely driven by infrastructure development,” Mishra said.

He added that residential returns are moderating, with investors increasingly stuck and end users struggling with affordability. According to Mishra, only developers with strong land banks and realistic pricing strategies will be able to withstand potential downturns.

Experts broadly agree that select commercial segments offer relatively better visibility. Bohra noted that office spaces backed by GCC demand, warehousing linked to infrastructure corridors, and data centres—driven by AI, cloud computing and digitalisation—are expected to be key growth drivers over the next few years.

Residential real estate, meanwhile, is likely to deliver more moderate and realistic returns, especially compared to the sharp price run-up seen in recent years, according to Mishra. Long-term returns of 8–10 per cent remain achievable, particularly in locations benefiting from sustained infrastructure development.

Experts advise buyers to remain cautious in 2026. According to Mishra, avoiding fear-of-missing-out (FOMO), negotiating aggressively, opting for group buying where possible, and keeping home loans pre-approved can improve bargaining power. Rental yields also vary significantly by market, with cities like Bengaluru and Pune offering higher yields compared to NCR or Mumbai.

(Disclaimer: The views/suggestions/recommendations expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.)