WFH returns? Modi's appeal could change office, housing demand across India

From Offices to Suburbs: How Modi's Work-From-Home Appeal May Impact Real Estate

Prime Minister Narendra Modi’s appeal on Sunday asking Indians to revist  work-from-home practices to reduce fuel consumption amid the West Asia crisis may sound like a temporary energy-saving measure. But for India’s real estate sector, especially office markets and housing demand patterns, the implications could be much larger if companies begin adopting remote or hybrid work models again.

 

The appeal comes at a sensitive time for the property market. Over the past two years, India’s commercial real estate sector had finally begun recovering from the pandemic-era work-from-home disruption. Office leasing in cities like Bengaluru, Hyderabad, Pune and Gurugram had rebounded strongly as companies gradually pushed employees back to workplaces.

 

 

In fact, transactions for large office spaces with an area of one lakh square feet and above reached one crore ninety-five lakh square feet across eight cities in India during the first quarter of 2026, as per real estate consultancy firm Knight Frank India. This volume represented 65% of the total office leasing activity and indicated a growth of 3% from one crore ninety lakh square feet in the previous year. Bengaluru recorded seventy lakh square feet of transactions in this category which accounted for 77% of the ninety-two lakh square feet total volume in the city.

 

 2025 established yet another new record with 83.3 million sq. ft of gross leasing volumes for the full yea Bengaluru, Hyderabad, Pune, and Mumbai recorded their best-ever year in gross leasing terms, showcasing broad-based and secular demand across multiple industry segments, showed data analysed by JLL.  

• Now, PM Modi’s comments have revived an important question:
• What happens to real estate if India moves back toward large-scale work-from-home?

 

The answer is complicated because remote work does not impact all parts of the property market equally. In fact, some segments could suffer while others may benefit.

 

The Prime Minister’s appeal was primarily linked to rising oil prices and the need to reduce fuel consumption as geopolitical tensions in West Asia threaten global energy supplies.

 

India imports nearly 85% of its crude oil requirements. As oil prices rise, the country’s import bill increases sharply, putting pressure on:

 

• inflation,
• the rupee,
• transport costs,
• and foreign exchange reserves.

 

Daily commuting by millions of office workers significantly contributes to urban fuel consumption. By encouraging work-from-home where possible, the government is trying to:

 

• reduce petrol and diesel usage,
• lower traffic congestion,
• and conserve foreign exchange.

 

But even a temporary work-from-home revival could influence property markets because real estate is deeply tied to how and where people work.

 

The biggest impact could be on office demand

 

India’s commercial office market was one of the biggest casualties during the Covid-19 pandemic.

 

Between 2020 and 2022:

• companies reduced office space,
• delayed expansion plans,
• and renegotiated leases as remote work became mainstream.

 

Vacancy rates rose sharply in many business districts, especially in:

 

• Bengaluru,
• Hyderabad,
• Gurugram,
• Mumbai,
• and Pune.

 

Over the past two years, however, developers and landlords had begun seeing recovery as companies slowly called employees back.

 

If work-from-home returns on a wider scale again — even partially — it could slow fresh office leasing momentum.

 

For example:

 

• companies may postpone large campus expansions,
• reduce seat capacity requirements,
• or shift toward smaller flexible offices instead of long-term large leases.

 

This could particularly affect:

 

• premium office parks,
• co-working operators,
• business districts dependent on daily occupancy,
• and developers focused heavily on commercial real estate.

 

"PM Modi’s latest WFH appeal is principally to save fuel and foreign exchange for the duration of the current crisis. It does not fundamentally alter office real estate demand, which always has a long-term perspective. In the near term, more remote and hybrid work could boost flexible space and satellite-office models. It will also further fuel the demand for bigger, better-designed homes with workspaces, particularly in suburban corridors that began during the Covid pandemic and never really went away after that," said Santhosh Kumar, Vice Chairman - ANAROCK Group. 

 

Hybrid work may become stronger instead of full WFH

 

However, experts believe India is unlikely to return to full pandemic-style remote work permanently.

 

Instead, the bigger trend could be:

 hybrid work becoming more normalised again.

 

That means:

 

employees working from home two or three days a week,

while offices continue functioning with flexible attendance.

 

This changes real estate dynamics in a different way.

 

Companies may still need offices, but:

 

perhaps smaller,

more efficient,

and located closer to residential clusters.

 

Instead of giant headquarters housing thousands daily, demand may shift toward:

 

managed office spaces,

satellite offices,

and flexible work hubs.

 

"In a city like Hyderabad, which continues to witness strong growth driven by the IT and technology ecosystem, this shift could further strengthen demand for integrated and nature-focused residential communities offering connectivity, quality of life and flexibility for evolving work cultures,” said  Kirthi Chilukuri, Founder & Managing Director, Stonecraft Group.

 

Residential real estate could actually benefit in some areas

 

Ironically, work-from-home could help certain parts of the housing market.

 

One of the biggest lessons from the pandemic was this:

when people spend more time at home, they want larger homes.

 

During Covid:

• demand surged for:
• bigger apartments,
• balconies,
• home offices,
• gated communities,
• and suburban housing.

 

Many buyers moved away from cramped city-centre apartments toward:

 

• peripheral suburbs,
• plotted developments,
• and integrated townships.

 

"A wider adoption of hybrid and work-from-home models is likely to further influence how people choose their homes and communities. Homebuyers today are increasingly looking for larger living spaces, wellness-oriented environments, better community infrastructure and developments that can comfortably support both living and working needs. This evolution is also expected to further accelerate demand in the residential housing segment, particularly for integrated communities that offer a more balanced and future-ready lifestyle," said Kirthi Chilukuri, Founder & Managing Director, Stonecraft Group.

 

If hybrid work strengthens again:

• homebuyers may once again prioritise:
• larger spaces,
• extra rooms,
• and lifestyle-driven housing.

 

"“Since COVID, we have seen customers prioritising a workspace within their homes, and we believe this call from PM Modi is reinforcing that trend. As developers, we have already incorporated this into our design philosophy, and all our homes come with a dedicated work-from-home area integrated into the design. Our customers appreciate these small but meaningful touches that make practical sense,”said Ashish Jerath, President - Sales & Marketing at Smartworld Developers.

 

Tier-2 cities could gain again

 

Another important shift could happen geographically.

 

During the pandemic, many professionals temporarily relocated from expensive metros to:

 

• Jaipur,
• Chandigarh,
• Indore,
• Kochi,
• Coimbatore,
• Lucknow,
• and other Tier-2 cities.

 

Remote work allowed employees to:

 

stay closer to families,

reduce living costs,

and improve lifestyle quality.

 

If work-from-home flexibility increases again, some professionals may reconsider living permanently in costly metro centres.

 

That could boost:

 

• housing demand,
• rentals,
• and land prices
• in emerging Tier-2 cities.

 

In fact prices in India’s Tier-2 and Tier-3 cities could rise sharply over the next few years as large-scale infrastructure projects and industrial expansion drive demand in emerging urban centres, according to a report by proptech firm Square Yards.

 

The report, titled “Realty’s Next Growth Engines: Tier-2, Tier-3 Markets in Focus”, estimates that land values in several emerging cities could increase between 25% and 100% over the next two to four years, particularly in areas benefiting from new infrastructure corridors and employment hubs.

 

Cities such as Bhubaneswar, Cuttack, Erode, Puri, Varanasi and Visakhapatnam are expected to lead the next phase of real estate growth as government-led infrastructure investments expand India’s economic footprint beyond major metropolitan centres.  However, some experts don't see any immediate impact  

"Work-from-home discussions following the Prime Minister’s speech are unlikely to have any immediate impact on the real estate sector unless such measures are formally mandated or widely institutionalized by corporates. Post-COVID trends clearly indicate that most companies gradually reverted to physical office attendance after observing challenges related to employee productivity, collaboration, and organizational efficiency in prolonged remote-working environments.

 

As a result, we do not anticipate any significant short-term impact on office leasing demand or commercial real estate occupancy levels purely due to renewed work-from-home discussions.

 

However, the larger concern for the real estate sector stems from the ongoing geopolitical conflicts and their potential impact on the broader economy. Any prolonged global uncertainty could affect business sentiment, corporate expansion plans, employment generation, and income growth. This may, in turn, influence office leasing activity as well as demand in the high-ticket and luxury housing segments, which are more sensitive to economic volatility and investment sentiment," said Pankaj Kapoor, MD at Liases Foras, a real estate consultancy firm.