The way forward lies in streamlining regulations and simplifying compliance to reduce the burden on developers.

What are the major market trends in the North India real estate market?

North India’s real estate market is witnessing increased activity across residential, commercial, industrial and alternative asset classes. While Delhi NCR continues to be the anchor of this growth, the uptick is no longer limited to the capital region alone. Tier-II cities like Lucknow and Jaipur are increasingly making their presence felt- particularly in land transactions, with developers announcing plans to build new retail and hospitality projects in these emerging cities. Lucknow, in particular is a key beneficiary of the return to office mandate, supported by the combination of state government’s policy push and companies’ strategy to go, where they can find employable talent pool.

In the commercial space, Delhi NCR remains one of India’s top eight office markets, consistently ranking high in terms of absorption, occupier interest and supply. Areas like Gurugram and Noida have seen robust leasing activity last year, driven by demand from IT/ITES firms, global capability centres (GCCs), and co-working operators. The launch of large-scale infrastructure projects like the Dwarka Expressway and upcoming transit hubs continue to support long-term commercial growth in the region.

On the residential front, after two consecutive years of frenetic activity, the markets have become stable, especially in the luxury and high-end segments. Investors are still active in the market, but they are exercising higher degree of due diligence. While marquee luxury residential projects are getting an unprecedented response, it is the mid-and high-end segments that have seen a steady flow of new launches over the past 15 months. Noida is a prime example of this surge- residential launches have almost doubled in 2024 (7,484 units) as compared to 2023, largely in anticipation of the upcoming Jewar International Airport. Meanwhile, Dwarka Expressway, officially inaugurated in Q1-2024, witnessed 22% (7,261 units) of the total launches this year, representing a threefold from 2023. Launch prices also reflect this momentum, with the Q1 2025 weighted average launch price rising to approximately Rs 17,600 per sq. ft., a 20% year-on-year increase.

On the industrial front, Noida has secured new joint ventures aimed at setting up semi-conductor manufacturing facilities, while data center operators are expanding their footprint beyond NCR- including a large center coming up near Lucknow.

The meetings, incentives, conferences, and exhibitions (MICE) eco-system is also gaining traction, with the India International Convention & Expo Centre (IICC), also known as Yashobhoomi, acting as a catalyst for surrounding real estate activity. Developers are actively exploring opportunities for hospitality and residential developments to complement this growth.

Another important initiative in Gurugram is the development of Global City project, a mixed land use township project. It is strategically located over more than 1000 acres of land and enjoys direct accessibility from the 8-lane Dwarka Expressway (Northern Peripheral Road) and Pataudi Road. The project is expected to serve as a key urban centre for business, retail, and high-density residential development in the coming years.

Together, these developments point to the enduring attraction of North India as a prominent real estate hub with immense growth opportunities for developers and investors over the medium to long term. Sustained real estate growth, especially across Tier II & III cities is likely to have a strong impact on economic development and employment generation in the region over the next few years.

How is the demand trend in residential and commercial segments?

The demand for office space in the Delhi NCR has remained robust through 2024 and into early 2025, underpinned by strong leasing activity and limited new supply. While total new office supply across the region stood at 4.69 million sq feet (msf) in 2024, fresh leasing surpassed 7.06 msf, leading to a notable 183 basis point decline in vacancy levels.

A key trend shaping the commercial market is the shortage of high-quality supply in Central Business District (CBD) locations. This has prompted occupiers—especially from sectors like IT-BPM, professional services, Global Capability Centers (GCCs) and flexible space operators—to make pre-commitments up to two to three years in advance.

Beyond NCR, other cities are beginning to mirror this trend. A leading professional services firm recently inaugurated its new office in Lucknow- a move that is expected to drive additional demand for retail and residential development in the region. Meanwhile, Indian start-ups are increasingly choosing to relocate to premium spaces within Gurugram’s CBD, signaling rising aspirations and a preference for high quality workplaces.

On the residential front, sales have seen some moderation, largely due to macroeconomic factors and price sensitivity among mid-segment buyers. However, developers are responding with targeted strategies, including innovative marketing campaigns aimed at pan-India buyers and the Indian diaspora. These efforts are expected to support renewed traction in the coming quarters, especially with the supportive interest rate environment and continued urban infrastructure upgrades.

What are the factors that propel the growth of real estate market in the region?

India is projected to be the fastest growing large economy in 2025, and Delhi NCR is a natural beneficiary of this momentum. The growth of the real estate market in the region is driven by improved infrastructure, demand for housing from all income groups, sustained space take-up by corporates and a strong interest from Non-Resident Indian (NRI) investors.

The expansion of metro lines, highways, and flyovers has greatly enhanced connectivity, making it easier for people to commute and live in different parts of the region. With an increase in population and the rise of nuclear families, there is a growing demand for budget-friendly housing options that offer modern amenities.

Delhi NCR continues to be a hub for businesses, with areas like Gurugram and Noida witnessing increased demand for office spaces and retail properties. The interest shown by domestic and foreign MNCs along with the creation of business hubs are also among key contributors to its growth.

Noida is fast emerging as a major industrial hub in North India backed by the government’s policy push, especially in terms of land allocations for a wide range of manufacturing, warehousing and data centre projects. The data centre policy unveiled by the Uttar Pradesh government in 2021 is a key initiative to drive data centre developments in the region and has attracted a number of large data centre operators in the region.

This multi-dimensional growth across asset classes reflects strong investor confidence and underlines the long-term potential of the real estate sector in North India.

What are the challenging factors prevailing for the real estate market? What is the way forward?

Some of the primary challenges facing the real estate market in North India include complex and frequent regulatory changes, infrastructure bottlenecks, and concerns around pollution and water scarcity. The steady rise in property prices, especially in prime locations, has also made home ownership increasingly unaffordable for middle and lower-income groups.

In terms of sustainability, while it is gaining prominence, there remains significant potential for broader integration of green practices across the industry- something that can further enhance buyer confidence and meet the evolving expectations of corporate occupiers.

The way forward lies in streamlining regulations and simplifying compliance to reduce the burden on developers. A holistic region-wide infrastructure development can bring synergy and address last-mile connectivity concerns. Strengthening government schemes like Pradhan Mantri Awas Yojana (PMAY) and encouraging developers to pursue a balanced mix of product offerings can help address the issue of high property prices.

Lastly, promoting green building practices and ensuring environmental sustainability can make the region more attractive to buyers concerned about long-term environmental impact

What is your market outlook for real estate in northern region?

The outlook for the real estate sector in Northern India remains positive across asset classes. The office sector is expected to witness ~20 msf of new supply between 2025 and 2027, while the retail sector is set for a significant boost with the opening of several large, institutionally owned malls during the same period. There is also an increased interest from reputed pan-India developers, many of whom are exploring opportunities to expand into North India, particularly in the high growth Delhi NCR region.

That said, some near-term uncertainty may persist, driven by evolving global economic conditions, including the trade and tariff policy of the US administration. As a result, some investors and corporates may temporarily adopt a cautious, wait-and-watch approach.

However, the long-term fundamentals of the Indian real estate market remain strong. The Northern region, supported by infrastructure development, policy momentum, and a growing urban consumer base, continues to offer robust growth prospects. Over the next few years, this region is well-positioned to attract sustained investment and development activity across commercial, residential, retail, and alternative asset classes.