Mumbai, a bustling metropolis and the financial hub of India, is currently witnessing a remarkable surge in its real estate sector. A staggering Rs 17,867 crore has been raised through capital markets during the first nine months of FY26, according to a recent report by Equirus Capital. This achievement marks a significant milestone, as the number of completed deals has equaled the total from the entire fiscal year of FY25. With strong investor interest, FY26 is poised to become the most robust year for real estate capital market activities in the past six years.
The capital raised during this period is attributed to 11 notable deals, including IPOs, Qualified Institutional Placements (QIPs), Real Estate Investment Trusts (REITs), and rights issues. This diverse range of fundraising options reflects sustained investor confidence in the real estate market. Since FY18, the sector has collectively garnered Rs 72,331 crore, with REITs taking the lead by raising Rs 31,241 crore, showcasing their growing popularity among investors. Large-cap companies have also made significant contributions, raising Rs 20,437 crore, while mid-cap and small-cap players secured Rs 12,496 crore and Rs 8,156 crore, respectively.
Equirus Capital's report emphasizes the current affordability of housing in India, which is at its best level in nearly three decades. This positive trend is driven by stable home loan rates, consistent rental yields, and rising income levels. The property price-to-annual income ratio has seen a remarkable decline from 22 in 1995 to 3.3 in 2024, indicating a substantial improvement in housing affordability across urban landscapes. Moreover, home loan rates and rental yields have remained stable since FY21, providing much-needed relief to prospective homebuyers.
Looking ahead, analysts predict that the gap between home loan rates and rental yields will narrow to below 500 basis points in FY26, further stimulating housing demand. Supported by changing lifestyles, increasing aspirations, and favorable financing conditions, real estate has emerged as the most preferred asset class in H1 2025. The ongoing upcycle in the sector is expected to continue, backed by strong economic growth and evolving consumption trends.
Overall, the residential real estate market across India is demonstrating resilience, with absorption levels either matching or surpassing new supply in recent months, a trend that bodes well for future developments. As cities like Mumbai continue to thrive, the real estate sector is confident in its potential to deliver sustained growth and investment opportunities in the coming years.
