Credit: Adobe StockMarket Radar India: Office Boom Masks Housing Crisis
Global firms fuel a record office boom, but soaring home prices create a deepening affordability crisis for many
September 9, 2025Real Estate
Written by Jorge Aguinaga
As India engages in crucial trade negotiations with the European Union and the United States, the national economy is navigating a period of global uncertainty.
The impact of US tariffs is already being felt by exporters, creating a fragile mood that, according to reporting from Bloomberg, has at times rattled investors and sent ripples into sectors linked with technology firms' fortunes.
Yet, amidst these headwinds, India's property sector is not just holding firm; in many areas, it's thriving, driven by powerful domestic and international currents.
An analysis by EY highlights that this is particularly evident in the life sciences sector, where 23 of the world’s top 50 companies have established GCCs in India, with most arriving in the last five years.
The number of GCCs in the country is projected to nearly double to 3,000 in the next 5-7 years, signalling sustained demand for premium office properties. This surge has directly fuelled the growth of REITs, as developers build the high-quality, tech-enabled workplaces these global firms demand.
This intent is underpinned by strong growth in key sectors and an office-first policy, with 94% of firms preferring employees to work from the office at least three days a week. The result has been a record 90 million square feet of office space absorption.
The JLL study highlights that work-life balance has now overtaken salary as the leading priority for employees with their current employer. This creates a new challenge for businesses: to make office time valuable and commute-worthy by focusing on high-quality spaces, holistic wellbeing, and providing employees with autonomy over their time.
(Adobe Stock)
The latest ANAROCK Homebuyer Sentiment Survey shows that 63% of respondents now consider real estate the best asset class for investment, ahead of equities and gold. This confidence is translating into a clear preference for premium and spacious living.
The preference for larger homes is clear, with 45% of buyers seeking 3BHK units. This trend extends to specialised niches like "wellness real estate," which can command a 10-30% premium as buyers prioritise health and sustainability.
Over 60% of affordable home seekers are dissatisfied with their options, citing poor locations, low construction quality, and small unit sizes.
While residential prices across the top seven cities have risen by more than 50% in the last two years, this has become a major concern for 81% of potential buyers, pushing them to delay or cancel purchases.
As India engages in crucial trade negotiations with the European Union and the United States, the national economy is navigating a period of global uncertainty.
The impact of US tariffs is already being felt by exporters, creating a fragile mood that, according to reporting from Bloomberg, has at times rattled investors and sent ripples into sectors linked with technology firms' fortunes.
Yet, amidst these headwinds, India's property sector is not just holding firm; in many areas, it's thriving, driven by powerful domestic and international currents.
The Commercial Engine
India's office market is experiencing a period of extraordinary expansion, solidifying the country's role as a global business hub. This boom is primarily powered by two forces: the rapid growth of Global Capability Centres (GCCs) and the ambitious expansion plans of domestic companies.
(Adobe Stock)
The GCC Phenomenon
According to a survey by CBRE, GCCs now account for a staggering 35-40% of total office space absorption in India. No longer just back-office support units, these centres have evolved into high-value innovation hubs focused on R&D, AI, and core engineering.An analysis by EY highlights that this is particularly evident in the life sciences sector, where 23 of the world’s top 50 companies have established GCCs in India, with most arriving in the last five years.
The number of GCCs in the country is projected to nearly double to 3,000 in the next 5-7 years, signalling sustained demand for premium office properties. This surge has directly fuelled the growth of REITs, as developers build the high-quality, tech-enabled workplaces these global firms demand.
Domestic Firms Drive Expansion
It's not just international firms driving demand. The CBRE survey also reveals that 85% of domestic companies in India plan to expand their office portfolios over the next two years, a significant increase from 73% in 2024.This intent is underpinned by strong growth in key sectors and an office-first policy, with 94% of firms preferring employees to work from the office at least three days a week. The result has been a record 90 million square feet of office space absorption.
The Evolving Workplace
While companies are pushing for a return to the office, a comprehensive JLL Workforce Preference Barometer study shows that employee expectations have fundamentally shifted. Although a majority of workers accept hybrid policies, their compliance and engagement hinge on the quality of the office experience.The JLL study highlights that work-life balance has now overtaken salary as the leading priority for employees with their current employer. This creates a new challenge for businesses: to make office time valuable and commute-worthy by focusing on high-quality spaces, holistic wellbeing, and providing employees with autonomy over their time.
(Adobe Stock)The Residential Divide: Luxury Soars While Affordability Falters
The residential market tells a more complex story - one of stark contrasts. On one hand, demand for high-end and luxury properties has never been stronger; on the other, the affordable housing segment is facing a severe contraction.The latest ANAROCK Homebuyer Sentiment Survey shows that 63% of respondents now consider real estate the best asset class for investment, ahead of equities and gold. This confidence is translating into a clear preference for premium and spacious living.
The High-End Boom
Demand for homes priced between INR 90 lakh and 1.5 crore has surged, now favoured by 36% of buyers, according to the ANAROCK survey. Concurrently, sales of luxury homes priced above INR 1.5 crore accounted for 21% of all units sold in the top seven cities in early 2024, a threefold increase in five years.The preference for larger homes is clear, with 45% of buyers seeking 3BHK units. This trend extends to specialised niches like "wellness real estate," which can command a 10-30% premium as buyers prioritise health and sustainability.
The Affordability Crisis
In sharp contrast, the ANAROCK data also shows that the demand for affordable homes (priced below 45 lakh) has shrunk to just 17% in the first half of 2025, down from 36% in the same period in 2020. This isn't just a demand issue; it's a crisis of supply and satisfaction.Over 60% of affordable home seekers are dissatisfied with their options, citing poor locations, low construction quality, and small unit sizes.
While residential prices across the top seven cities have risen by more than 50% in the last two years, this has become a major concern for 81% of potential buyers, pushing them to delay or cancel purchases.