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India Ratings projects a 3-4% increase in home prices for FY26, attributing this moderation to rising inventory levels and a deceleration in demand. Residential sales growth is expected to slow to 9% year-on-year, a decline from the 17% observed in FY25. While Tier I developers maintain resilience, the affordable housing segment continues to lose market share across major Indian cities. Notably, Bengaluru experienced the highest price surge in the first nine months of FY25, followed by the National Capital Region and Pune. The Mumbai Metropolitan Region accounted for the largest market share during this period.
India Ratings has indicated that home prices are anticipated to grow by 3-4% in FY26, a slowdown compared to previous years. This moderation is attributed to increasing inventory levels and a cooling demand. Advertisement
In the first nine months of FY25, average residential prices across India's top eight cities rose by 8% year-on-year, a decrease from the 21% surge in FY24 and 14% in FY23. Bengaluru led with a 23% increase, followed by the National Capital Region at 13% and Pune at 12%.
Residential sales growth is projected to decelerate to 9% year-on-year in FY26, down from 17% in FY25. The Mumbai Metropolitan Region held the largest market share at 25% among the top eight cities, with Hyderabad and Pune following. Chennai recorded the highest growth at 46% year-on-year in the first nine months of FY25.
Developers are anticipated to maintain positive growth in collections and operating cash flows, supported by sector consolidation and delayed launches amid limited unsold stock. Tier I developers are expected to continue leading in sales, benefiting from market consolidation and strong brand recognition. However, this consolidation is projected to moderate through FY26.
The anticipated moderation in home price growth and residential sales in FY26 reflects a maturing real estate market adjusting to evolving demand and supply dynamics. While Tier I developers are poised to maintain their stronghold, the shifting landscape underscores the need for adaptability and strategic planning. As affordability becomes a central concern, stakeholders must navigate these changes to sustain growth and meet the evolving needs of homebuyers.
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