Sales across India’s residential real estate market in the top seven metropolitan cities may fall as much as 3 per cent in FY26. This is as per the latest estimates by ICRA. The ratings agency highlighted that affordability is a key concern and one of the main reasons for the lower sales.
From FY23 to FY25, the average selling price for residential units has risen by 10 per cent. The price rise has hit the affordability for home buyers, ICRA added. The total residential sales across Mumbai, Delhi, Bengaluru, Hyderabad, Pune, Chennai and Kolkata are expected to be around 620-640 million square feet in FY26.
ICRA says that the residential real estate market in the seven biggest metropolitan cities of India still remains in the stabilising phase after a challenging FY25. The new projects launched in the seven cities declined 14 per cent in FY25
Product launch boost in FY26
However, the new project launches are expected to bounce back. ICRA estimates that new product launches may increase by 4 – 7 per cent in FY26 to a total of 630-650 million square feet.
Anupama Reddy, Co-Group Head & Vice President– Corporate Ratings, ICRA, said that calibrated launches by developers helped in maintaining a comfortable inventory level, despite a moderation in sales momentum in the broader residential market.
“The years-to-sell (YTS) metric is estimated to remain healthy at 1-1.1 times by March 2026. The ASP rose by 16% in FY2025 and is projected to further increase by 6 8% in FY2026.”, Reddy added.
Luxury segment shines
While the mid-price segment sales have suffered dual constraints of low product launch and price increase, the luxury segment sales, in terms of area, increased by 6 per cent in FY25. The trend continued in the first quarter of FY26 also.
Reddy added that the projected growth is being driven by the increasing share of the luxury segment, low inventory overhang and comfortable YTS and consolidation in the industry with better pricing power for the prominent listed developers