India’s housing market is caught in an unusual bind – with the sales slipping, developers are now pulling back on new projects. Yet residential prices refuse to fall.
Pan-India housing sales declined 7% year-on-year in Q4FY26, while new project launches dropped a sharper 17%, according to a JM Financial report on India’s residential property market for March 2026. But with unsold inventory shrinking 5.1% over the same period, residential prices still rose 6.6%, slower than the double-digit gains of FY25.
Sales decline moderates but demand recovery remains gradual
Housing demand continued to ease in March 2026, though conditions were not as weak as in the preceding quarter.
Pan-India housing sales fell 7.0% year-on-year in March 2026 compared with a 9.9% decline recorded in December 2025. According to the brokerage, this points to some stabilisation in demand trends even as buyer activity remains softer than earlier growth phases.
The report suggested that residential demand has not weakened uniformly, but transaction momentum has yet to return to stronger levels seen previously.
“Real estate indicators remained mixed in March 2026, with housing demand continuing to soften while inventory levels tightened further,” JM Financial said in its report.
Developers turn cautious as fresh project launches slow
Supply conditions weakened more sharply than demand.
New residential launches declined 17% year-on-year in March 2026, a steep deterioration from the 1.7% dip in December 2025 and weaker than the average trend through FY26. JM Financial attributed this to caution among developers amid softer demand visibility.
A slower launch pipeline can reduce immediate supply pressure and support existing inventory, but it also indicates measured expansion plans across residential markets.
“New launches weakened sharply to -17.0% YoY, suggesting developers remain cautious on fresh project additions,” JM Financial said.
Falling unsold inventory supports residential pricing
Even as sales slowed, inventory conditions continued to improve.
Unsold inventory fell 5.1% year-on-year in March 2026, steeper than the 3.3% contraction in December 2025, extending an absorption trend that has run for several quarters. That tightening inventory is the key reason prices have held up despite softer transaction volumes.
Residential prices rose 6.6% year-on-year, down from 13.5% a year earlier, and below the 12.5% (June 2025) and 9.3% (September 2025) readings that marked the gradual cooling from peak levels.
The brokerage indicated that tighter inventory conditions continue to provide support to pricing even as demand growth cools.
Price growth eases from earlier peaks
Price momentum remained positive but slowed materially.
From 13.5% growth in March 2025, price appreciation has eased quarter by quarter, to 12.5%, then 9.3%, and now 6.6%. The moderation is unmistakable, but lower inventory has prevented the kind of correction that a 17% drop in launches and a 7% fall in sales might otherwise have triggered.
JM Financial said the pattern points to a market where supply discipline and inventory reduction are doing the heavy lifting, offsetting softer buyer activity to keep prices in positive territory.
Conclusion
India’s residential market is in a phase of managed deceleration, activity is cooling, but pricing has not cracked. Sales and launches remain under pressure, while inventory continues to tighten. That combination has kept price growth positive, even as gains moderate from the peaks of FY25.
For now, the market’s resilience rests on supply restraint rather than demand recovery, a distinction worth watching as FY27 begins.
Disclaimer: The real estate market data, pricing trends, and inventory metrics discussed in this report are based on institutional research findings and do not constitute direct investment advice, property valuation guidelines, or financial advisory recommendations for retail investors. Residential property investments are subject to cyclical demand shifts, localized micro-market variations, execution timelines, and macroeconomic indicators, meaning individual project performance and capital appreciation can vary widely. Readers are strongly advised to consult a qualified real estate consultant or SEBI-registered financial professional before making specific property acquisition or capital allocation decisions.
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