Domestic Capital Drives Transformation in Indian Real Estate Sector
Indian real estate’s big shift: Domestic capital emerges as the new growth engine, say industry experts
Image: The Economic Times
India's real estate sector is undergoing a significant transformation as domestic investors increasingly dominate institutional capital flows, accounting for 76% of the $1.6 billion in investments in Q1 2026. This shift is expected to enhance transparency, governance, and the institutionalization of real estate, positioning it as a mainstream asset class over the next three to five years.
- 01Institutional investments in Indian real estate rose by 26% year-on-year, with domestic investors contributing $1.2 billion.
- 02Domestic capital has surpassed foreign inflows in four of the last five quarters, indicating a sustained investment shift.
- 03India has approximately $41 billion of untapped domestic institutional capital available for investment.
- 04The shift towards domestic capital is expected to lead to greater market stability and maturity in the real estate sector.
- 05Emerging urban corridors and branded developers are set to attract increased investor interest due to a focus on long-term value.
Advertisement
In-Article Ad
The Indian real estate sector is witnessing a pivotal transformation as domestic investors emerge as the primary source of institutional capital. According to a report by Cushman & Wakefield, institutional investments reached $1.6 billion in Q1 2026, with domestic investors accounting for 76% of this figure, a trend that has been consistent over the past five quarters. Experts like Pratik Tibrewala from M3M India emphasize that the sector has evolved from reliance on foreign investments to a diversified capital ecosystem that includes Real Estate Investment Trusts (REITs), Alternative Investment Funds (AIFs), and private credit. This shift is attributed to strong domestic liquidity and increasing participation from family offices and private wealth platforms. Founders of Ace Consulting noted a 53% increase in domestic institutional investments in the first half of 2025, indicating a shift in perception where real estate is now seen as a strategic asset for long-term wealth creation. This trend is expected to enhance transparency, governance, and stability in the sector, aligning it more closely with India’s urban growth narrative over the next decade.
Advertisement
In-Article Ad
The shift towards domestic capital is likely to stabilize the Indian real estate market, making it more resilient and organized, which will benefit homebuyers and investors.
Advertisement
In-Article Ad
Reader Poll
Do you think domestic capital will continue to dominate the Indian real estate market?
Connecting to poll...
More about Cushman & Wakefield
Read the original article
Visit the source for the complete story.