FreepikThe Top 4 Insights for Indian Residential Investment in 2026
The GRI Barometer Q4/2025 reveals infrastructure execution, Tier 2 growth, and NRI flows as the structural drivers for 2026
December 2, 2025Real Estate
Written by:Jorge Aguinaga
Executive Summary
- Industry leaders have identified infrastructure connectivity projects and rising household incomes as the dominant drivers of long-term value that now outweigh the traditional demographic dividend by a factor of three to one.
- The search for risk-adjusted alpha is driving investors beyond saturated metros where residential projects in Tier 2 and 3 cities are now rated as a more compelling opportunity than design-led luxury in Tier 1 markets.
- International demand has matured from speculative tourist capital into a reliable funding source with 78% of industry leaders now classifying Non-Resident Indian investment as a stable structural component of the residential capital stack.
The Pivot from Caution to Deployment
Exclusive data from the GRI Residential India Barometer Q4/2025 reveals that the market has executed a definitive shift from caution to deployment, with 71% of firms planning to increase their residential investment volume over the next 18 months.This expansionary stance sees 26% of respondents planning a significant increase driven by strong market fundamentals while nearly half maintain a cautiously optimistic outlook for moderate growth.
Notably, only a negligible 6% anticipate a significant decrease to shift focus to other asset classes, confirming that nearly three-quarters of investors are now positioning to expand their exposure.
Infrastructure and Income Eclipse Demographics
Structural economic factors have surpassed population growth by a factor of three to one as the primary driver of real estate demand.Industry leaders now identify infrastructure and connectivity projects (67%) and rising household income (51%) as the most powerful long-term structural drivers of residential demand and price appreciation.
This marks a significant departure from traditional narratives as the demographic dividend was cited by only 21% of respondents, confirming that infrastructure projects and rising incomes now definitively outweigh demographics as the primary market catalysts.
The Strategic Shift to Tier 2 Growth Corridors
Tier 2 growth corridors have overtaken premium Tier 1 projects as the top investment opportunity for the year ahead. In the search for the most compelling risk-adjusted returns, 32% of respondents selected residential projects in Tier 2/3 growth corridors, edging out design-led premium/luxury projects in Tier 1 cities (29%).This data indicates that investors are shifting strategies to capture volume growth in emerging cities rather than solely chasing yield in saturated luxury markets.
NRI Capital Matures into a Structural Pillar
NRI capital flows have matured into a structural and significant market driver for 78% of respondents.The survey reveals that international demand is no longer viewed as speculative tourist capital but as a reliable pillar of the residential funding stack, with 41% of leaders classifying Non-Resident Indian (NRI) flows as a steady, important contributor and a further 37% viewing them as stable and important.