India's real estate investment drops 33% in Q2 amid global caution

According to data released by real estate consultant Colliers India, institutional investments in India's real estate sector decreased from $2.53 billion in the April-June period of the previous year to $1.69 billion in the same quarter of 2025. A key factor in this reduction was the almost halving of fund inflows from foreign investors, which dropped from $2.04 billion to $1.04 billion during the reviewed period.

Conversely, domestic investors demonstrated continued confidence in the Indian market, injecting $642.8 million in April-June, marking a substantial 32% increase from $486.5 million in the corresponding period last year. Badal Yagnik, CEO of Colliers India, highlighted this trend, stating, "Domestic capital has emerged as a key driver in India's real estate investments, with its share in total investments rising steadily from 16 per cent in 2021 to 34 per cent in 2024."

Furthermore, Yagnik noted that domestic investments accounted for a significant 48% of total inflows in the first half of 2025 (H1 2025). He emphasized the crucial role of domestic capital: "Their growing dominance has helped cushion the impact of global uncertainties and push total investments to the USD 3 billion mark in the first half of 2025."

Looking at the broader first half of 2025, institutional investment in real estate experienced an overall 15% drop, falling to $2.99 billion from $3.52 billion in the year-ago period. Foreign institutional investment specifically declined to $1.57 billion in H1 2025, compared to $2.59 billion in H1 2024, as international investors remained wary amid evolving macroeconomic conditions, credit flow issues, and inflationary pressures. In contrast, domestic investors boosted their contributions by a robust 53%, pouring $1.42 billion into the market in the first six months of 2025, up from $934.7 million in the same period of 2024.

The institutional flow of funds encompasses investments from a diverse range of entities, including family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity firms, real estate fund-cum-developers, foreign-funded NBFCs, listed REITs, and sovereign wealth funds.