India’s real estate market is undergoing a major transformation in 2025, with a clear consolidation trend as buyers increasingly favour Grade A developers known for reliability, regulatory compliance, and on-time delivery. According to a recent analysis by ratings agency ICRA, the share of top listed developers in overall real estate sales has been steadily increasing, signaling a power shift in the sector.

Homebuyers now prioritize credibility, timely possession, and construction quality over aggressive marketing or price discounts. This shift in consumer behavior is pushing small and mid-tier builders, many of whom lack regulatory discipline, out of the market. As large, well-capitalised players gain momentum, industry experts predict that these big builders will command more than 50% of the inventory in the coming years.

The Real Estate (Regulation and Development) Act (RERA), introduced to enhance transparency and protect homebuyers, has played a key role in this transformation. Builders who failed to register their projects, diverted funds, or missed delivery timelines have lost market credibility. Many such developers are now unable to secure financing or attract customers, resulting in a natural exit from the industry.

A senior executive from a leading real estate company remarked, “Consolidation is happening because of past practices of others. People trusted them, but that trust was broken. You can’t take people’s money and then play with it.” This sentiment echoes across the sector, where trust has become the currency of survival and growth.

ICRA's report highlights that:

• Grade A builders now account for a larger share of launches and project completions.

• Capital inflow, especially from institutional investors and banks, is heavily skewed toward top developers.

• Execution risk is significantly lower with branded players, encouraging buyers to book under-construction projects more confidently.

The COVID-19 pandemic had already accelerated the need for structural reform and compliance, but in the post-pandemic recovery, only those with strong balance sheets, digital infrastructure, and project management capability have been able to grow. This has allowed them to expand to new cities and acquire stalled or distressed projects, further expanding their footprint.

In addition to RERA, other policy shifts, such as stricter lending norms, GST compliance, and the increasing use of technology platforms for home buying, have made it easier for consumers to verify credentials and make informed decisions. These factors have further marginalized non-serious players who relied on opacity and short-term speculation.

Customer preferences have also evolved. Beyond price, today’s homebuyer demands:

• Clear land titles

• Transparent payment schedules

• Legal compliance

• On-time possession

• Quality amenities and construction

As a result, companies like Godrej Properties, DLF, Prestige Group, Brigade Enterprises, and Oberoi Realty are reporting record-high pre-sales, while many smaller builders have exited key urban markets like Mumbai, Delhi-NCR, Bengaluru, and Pune.

Industry analysts suggest that this consolidation will drive long-term stability in the housing market. With fewer but more competent players, the risk of project delays, buyer fraud, or unfinished developments drops substantially. Moreover, global investors, including private equity firms and sovereign wealth funds, prefer to partner with these Grade A developers, ensuring continuous capital infusion into the sector.

However, this consolidation also brings challenges:

• Housing affordability may take a hit as large developers focus on premium or mid-income projects, leaving the lower-income housing segment underserved.

• Land acquisition is becoming more competitive, pushing prices up.

• Smaller cities, where regulatory oversight is weaker, may still harbor non-compliant developers, exposing buyers to risk.

To ensure inclusive growth, experts recommend:

• Extending RERA compliance to Tier 2 and Tier 3 cities more rigorously.

• Encouraging public-private partnerships (PPPs) to develop affordable housing with credible developers.

• Providing incentives to mid-sized builders who demonstrate compliance and good governance.

The real estate consolidation is not just a business trend; it reflects a fundamental shift in buyer expectations and industry accountability. With the Indian housing sector expected to reach a valuation of over USD 1 trillion by 2030, this shakeout phase may prove essential in ensuring the sector’s credibility and long-term health.

In summary, the real estate industry in India is maturing, driven by regulatory clarity, consumer awareness, and the rising dominance of Grade A developers. While challenges remain, especially in the affordable segment, the consolidation wave is setting the stage for a more professional, transparent, and reliable realty ecosystem in the years to come.