Indian Residential Real Estate: Urbanisation and Infrastructure to Anchor Demand Through 2026

India’s real estate market, specifically on the residential side, is entering 2026 with structural strength. According to a Colliers India report, namely “India Real Estate 2026: Powered by Investment, Infrastructure & Innovation”, published in December 2025.

As per the report, India is experiencing a surge in housing demand that is going to remain resilient in the coming year. This surge of demand is backed by rapid urbanisation, sustained investment in infrastructure, growing household incomes, and evolving lifestyle preferences across the country. These are the core drivers shaping the residential absorption in major urban and semi-urban cities.

Takeaways of the Report

The report has positioned the residential real estate within a broader macroeconomic environment that is supportive of the growth it has made in the past few years. Despite the global trade issues and conflicts, the Indian real estate sector shows remarkable resilience, especially in the residential sector.

Factors like stable incomes, personal growth of people, improved credit access, government schemes, and reductions act as an influencing force to convert potential into homebuyers and sustain affordability, and boost buying trends.

In the background, the housing demand had remained firm throughout 2025, and this is a signal that it will remain so in the next year.

Driving Forces of The Real Estate Demand

One of the key factors of this growth is urbanisation, which is the single most powerful engine of residential demand. Cities in India are absorbing millions of new residents every year, which can be attributed to employment opportunities, education, better healthcare access, and growing lifestyle aspirations. Growth is no longer confined to the traditional city zones, peripheral zones, satellite towns, and even emerging Tier II and Tier III cities are also getting their share of the housing demand. Infrastructural projects in these areas have led to expansions, expressways, and transport corridors, which are redefining the residential map of the locality. These factors make an individual consider these areas for homeownership.

Infrastructural investment is inseparable from residential market performance, which is headed towards 2026. The report highlights how improved connectivity is unlocking new residential areas, especially in suburban and satellite zones of Tier I cities. These areas are witnessing a high demand for housing investments. Developers who invest in such areas see promised returns with people on the lookout for long-term homeownership.

Sustainability and Green Living

As per the report, people are well interested in green living when it comes to making a residential decision. These housings are supported by the government and are expected to see a boost in investments in 2026. Incentives, regulatory nudges, and rising consumer awareness are the wheels of this housing. Energy-efficient construction, water conservation systems, and solar-integrated homes are becoming more and more common in the upcoming residential launches.

As we move into 2026, residential real estate is set to remain a cornerstone of urban development. The trajectory that is predicted by Colliers suggests that housing growth will be defined less by cycles and more by transformation and development.