Housing sales across India’s top eight cities fell 2 per cent year-on-year to 95,973 units during the January-March quarter of 2026, even as residential prices continued rising across all major markets, according to the latest report by PropTiger. The divergence is intensifying concerns over affordability and the sustainability of premium-led housing growth.
The sector is also witnessing widening divergence between cities driven by technology-led employment growth and markets facing affordability pressure despite strong infrastructure expansion. Rising land costs, limited affordable supply and shifting buyer preferences are emerging as defining themes across the housing market.
Is Demand Being Managed?
According to the report, new housing supply across eight major cities remained largely unchanged at 93,065 units during Q1 2026, reflecting a growing shift towards measured launches and inventory discipline instead of aggressive expansion strategies.
Highlighting the sector’s move towards “absorption-led expansion rather than speculative inventory creation,” Deepak Sangwan, Chairman, Origen Realty, said developers have become far more cautious about unchecked launches and inventory build-up after earlier market cycles.
He further noted that peripheral growth corridors and emerging micro-markets are increasingly evolving into self-sustaining economic hubs with stronger employment, retail and connectivity ecosystems, allowing supply to align more closely with genuine end-user demand.
Have Homes Turned Unaffordable?
The report showed housing sales in MMR declined 15 per cent year-on-year to 26,116 units, while Pune recorded a sharper 21 per cent drop to 13,565 units during Q1 2026 despite continued infrastructure expansion across both markets.
While pointing towards rising affordability stress in core urban markets, Rahul Bahl, Managing Director, Krishna Buildestates (KBE), said limited supply is helping “protect pricing” as infrastructure-driven appreciation has significantly increased ownership costs for many buyers.
Drawing attention to the shrinking presence of middle-income housing in NCR, he said several projects in this category have become “nearly non-existent” because rapidly rising land prices are steadily pushing residential pricing beyond the reach of genuine end-users.
Is Infrastructure Losing Pull?
Despite broader moderation in some cities, the report highlighted that infrastructure-linked corridors continue attracting housing demand, with Bengaluru recording a 33 per cent rise in sales during the January-March quarter of 2026.
Defending infrastructure-led growth as a long-term real estate driver, Robin Mangla, President, M3M India, said connectivity upgrades continue to stimulate economic activity and create sustained value appreciation across emerging residential corridors.
Referring to regions such as Dwarka Expressway and the upcoming Jewar Airport corridor, he said infrastructure expansion continues generating strong buyer interest and long-term investment confidence despite temporary fluctuations in quarterly sales performance.
Who Can Buy Now?
The report noted that all eight major cities recorded annual price appreciation during Q1 2026 even as fresh supply in affordable and low-cost housing categories remained limited across major residential markets.
Amid rising traction in premium housing, Parveen Jain, President, NAREDCO, maintained that middle-income buyers still remain the backbone of India’s residential market despite changing consumer aspirations and stronger demand for upgraded living spaces.
While addressing concerns around rising home prices, he emphasised that increasing land acquisition costs, construction expenses and financing pressures are the primary drivers behind residential price appreciation rather than any deliberate shift away from end-user demand.
Are Developers Controlling Supply?
The report said unsold inventory levels remained broadly balanced during Q1 2026 as new supply additions stayed closely aligned with sales absorption, preventing any major inventory build-up across the sector.
Reinforcing the sector’s increasing focus on inventory discipline, Sangwan said developers are now prioritising measured launches and genuine demand pockets emerging across peripheral growth corridors instead of speculative supply expansion.
On the issue of pricing stability, Bahl observed that developers today have stronger financial discipline and greater pricing control because of institutional funding access, REIT-backed financing and tighter inventory management practices.
Is Housing Too Tech-Driven?
The report identified Bengaluru as Q1 2026’s strongest-performing housing market, driven largely by GCC and startup-led employment growth, while several traditional markets witnessed moderation in sales momentum during the same period.
Linking economic activity with housing demand creation, Mangla said employment generation and infrastructure growth continue to work together in sustaining buyer interest across emerging business and residential corridors.
Commenting on the growing influence of technology-led urban clusters, Jain said India’s housing market remains structurally resilient because of urbanisation and household formation trends, though cities such as Bengaluru are currently playing a disproportionately strong role in driving residential demand momentum. |
