Real Estate Investment 2025: Is It the Right Time to Invest? Here's What the Latest Data Reveals
As uncertainties loom over global markets, real estate remains a hot topic among Indian investors. But is now really the right time to invest in real estate? A recent report from Colliers India reveals mixed signals. While foreign institutional investments in Indian real estate have seen a sharp decline, domestic investors are showing renewed confidence, creating an interesting shift in the investment landscape.
📉 Institutional Investment Dips 15% in H1 2025
According to Colliers India, institutional investments in Indian real estate dropped by 15% during the first half of 2025, totaling $2.99 billion compared to $3.52 billion in the same period last year. The decline is largely attributed to cautious sentiment among foreign investors, driven by global political instability, economic uncertainty, and inflation pressures.
🌍 Foreign Investment Plummets
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In the April–June quarter of 2025, investments dipped by 33% to $1.69 billion, down from $2.53 billion during the same quarter in 2024.
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Foreign investors, in particular, have slashed their commitments, investing just $1.04 billion in Q2 2025, down from $2.04 billion last year.
This downturn is seen as a result of tightening global credit flow, concerns around macroeconomic health, and rising interest rates in developed economies.
🇮🇳 Domestic Investors Step Up
Despite the drop in foreign funding, domestic investors are stepping up their game. In Q2 2025 alone, domestic players invested $642.8 million, marking a 32% increase from $486.5 million in the same period last year.
According to Badal Yagnik, CEO of Colliers India, domestic capital has become a key driver of real estate investment in the country. In fact:
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Domestic capital accounted for 16% of total institutional investments in 2021.
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This figure doubled to 34% in 2024.
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In 2025 H1, domestic investment formed 48% of the total capital inflow into real estate.
📊 Investment Overview – January to June 2025
| Category | H1 2024 | H1 2025 | Change |
|---|---|---|---|
| Total Institutional Investment | $3.52 Billion | $2.99 Billion | ↓ 15% |
| Foreign Institutional Investment | $2.59 Billion | $1.57 Billion | ↓ 39% |
| Domestic Institutional Investment | $934.7 Million | $1.42 Billion | ↑ 53% |
This major surge in domestic investment has helped stabilize the overall institutional investment figure, despite global headwinds.
🏦 Who's Investing?
The broader category of institutional investors includes:
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Foreign Corporate Groups
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Family Offices
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Private Equity Firms
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Sovereign Wealth Funds
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Pension Funds
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Listed REITs
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NBFCs backed by foreign capital
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Real Estate Funds-cum-Developers
Their combined activity underscores the continued belief in India’s long-term real estate growth, especially among domestic institutions.
🧠 So, Should You Invest in Real Estate Now?
While foreign investors are treading carefully due to macroeconomic volatility, the rise in domestic capital suggests confidence in the Indian real estate sector remains intact. Investors looking for long-term growth may find opportunities, especially in:
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Affordable housing projects
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Commercial real estate in Tier-2 cities
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REITs and institutional-grade office spaces
The key lies in choosing the right segment and working with trusted developers to minimize risk.
✅ Final Verdict: Cautious Optimism
If you’re considering real estate investment in 2025, now might be a strategic entry point, especially with reduced competition from foreign capital. However, it’s crucial to:
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Conduct proper due diligence
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Monitor policy shifts
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Diversify across asset classes
While short-term fluctuations exist, India’s real estate fundamentals remain strong, especially with growing urbanization, government infra-push, and rising demand for residential and commercial properties.
