India’s real estate sector is showing renewed vigour, with capital market deals raising Rs 17,867 crore in the first nine months of FY26, matching the total deals recorded in FY25, according to a report by Equirus Capital. Analysts suggest that if this pace continues, FY26 could mark the highest fund-raising activity in the past six years, underlining investor confidence in the property market.
The report highlights that since FY18, real estate has attracted cumulative funding of Rs 72,331 crore. Real Estate Investment Trusts (REITs) accounted for the largest portion, raising Rs 31,241 crore, followed by large-cap developers at Rs 20,437 crore. Mid-cap and small-cap real estate firms secured Rs 12,496 crore and Rs 8,156 crore respectively. Industry experts attribute this robust inflow to a combination of stable economic growth, rising urban incomes, and improving consumer sentiment. A senior industry analyst noted, “The current funding momentum reflects strong investor appetite for real estate as a tangible asset, particularly in an environment of moderate inflation and steady rental yields.” Home loan rates and rental yields have remained largely stable since the COVID-19 pandemic, narrowing the gap between borrowing costs and rental returns. Equirus Capital projects this gap could fall below 500 basis points in FY26, enhancing the attractiveness of residential investments.
Affordability has improved considerably over the last three decades. The property price-to-annual income ratio, which stood at 22 in 1995, has declined steadily to 3.3 by 2024, reflecting a structural shift in urban housing accessibility. This improvement, coupled with lifestyle upgrades, higher disposable incomes, and low interest rates, has positioned real estate as a preferred investment avenue among Indian households. Residential absorption across top cities has matched or exceeded supply in recent years, further reinforcing market stability. The report notes that the seven largest urban centres have witnessed rising sales, supported by strategic new launches and diversified housing options catering to mid-income and premium segments. Industry experts emphasise that this trend is likely to continue in the near term, driven by urbanisation, growing affordability, and heightened investor interest in income-generating assets. While risks such as interest rate fluctuations and liquidity constraints persist, careful planning and targeted investment strategies can help maintain steady returns.
For policymakers and developers, these trends highlight the importance of sustainable urban growth, regulatory clarity, and inclusive housing solutions to ensure that India’s real estate remains a resilient pillar of economic development.
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India Real Estate Sector Raises Rs 17867 Crore In Nine Months
