Real Estate Outlook: How India’s Residential Market Will Shape Up In 2026

After nearly half a decade of sustained post-pandemic recovery, India’s residential real estate market is entering 2026 at an inflection point. Prices across major cities have risen sharply since COVID, driven by strong end-user demand, premiumisation, infrastructure-led growth, and higher construction costs. While this momentum has reinforced housing as a key long-term asset class, it has also pushed affordability to the forefront, prompting both buyers and developers to recalibrate expectations.

As 2025 draws to a close, early indicators suggest that the frenetic pace of price escalation seen over the last few years is moderating, giving way to more measured, micro-market-driven growth. Premium and luxury housing continue to outperform, even as mid-range and affordable segments face sensitivity to pricing and demand. Against a backdrop of global uncertainties, evolving job markets, and changing interest rate dynamics, the key question now is whether residential real estate can sustain its upward trajectory in 2026 - and under what conditions.

How Housing Market Fared In 2025 And the Outlook For 2026

India’s residential real estate market maintained strong upward momentum in 2025, with premium and luxury housing consolidating their position as the primary demand drivers. Homes priced above Rs 1 crore accounted for over half of total sales across major cities, reflecting a decisive shift in affordability thresholds, buyer aspirations, and the overall demand profile.

According to a recent report by Knight Frank, cities such as Bengaluru, Hyderabad, Chennai, and Delhi-NCR recorded double-digit price appreciation, driven by limited availability of quality supply and strong buyer confidence. Developers, in turn, sharpened their focus on premium projects offering brand credibility, sustainability features, enhanced privacy, and advanced digital integration.

In contrast, the affordable housing segment remained under pressure due to rising construction costs and constrained financing, underscoring the need for targeted policy support to restore balance across income groups.

Another report by ANAROCK Research indicates that housing sales in the nation’s top seven cities witnessed a 14 per cent decline in 2025, with about 3,95,625 units sold in the year against 4,59,645 units in 2024. However, the overall sales value of housing units saw a 6 per cent yearly jump – from Rs 5.68 lakh crore in 2024 to over Rs 6 lakh crore in 2025.

Commenting on the same, Anuj Puri, Chairman, ANAROCK Group, says, “2025 has been a year of major upheavals across several geopolitical and economic touchpoints, and the housing sector trend was of sale volumes stabilizing across the top 7 cities - but simultaneously of higher overall sales value. The sector's performance in 2026 will depend on several key factors, most notably rate cuts by the RBI and price control by developers. Amid the currently favourable economic outlook, lower home loan interest rates can bring back demand convincingly in the year ahead.”

Some of India’s top developers say that 2026 will be a defining period for the real estate sector. While some market experts have issued cautious outlooks, they firmly believe that high-quality projects will continue to be outliers that surpass market trends.

“The momentum built in 2025 will carry forward, driven by luxury-led growth, sustained NRI participation, and the rise of high-potential corridors such as Gurugram, Mumbai, Hyderabad, and Bengaluru. With India’s economic fundamentals aligned with the pace of infrastructure development, the year ahead promises deeper consolidation and a more sophisticated expression of urban living. We also anticipate new formats gaining prominence, including branded residences, senior living, vacation homes in leisure destinations, and ultra-luxury developments that redefine residential living in India,” says Aakash Ohri, Managing Director and Chief Business Officer, DLF.

Favourable government policies will further support demand, while the significant infrastructure upgrades underway across major Indian cities will begin to positively shape the real estate landscape, through enhanced connectivity, improved civic amenities, and strengthened investor confidence.

Robin Mangla, President, M3M India, says India’s residential real estate sector is entering a transformative phase, driven by rising urban aspirations, global exposure, and evolving lifestyle expectations.

“On the luxury front, branded residences are gaining prominence, reflecting a demand for world-class design, curated experiences, and premium amenities. This trend is no longer restricted to metropolitan centers; aspirational buyers in emerging urban hubs are also seeking homes that combine international standards with contemporary Indian lifestyles. At the same time, integrated townships are reshaping urban development across tier-1 and tier-2 cities. These ecosystems combine residential, commercial, and recreational spaces, offering convenience, connectivity, and community living at scale. They represent a shift from isolated developments to holistic, self-sustaining neighborhoods that respond to the changing needs of India’s growing urban population,” Mangla adds.

Looking ahead, the residential market is becoming more organised, experience-driven, and lifestyle-led. The coming decade is most likely to be defined by developments that elevate living standards while integrating infrastructure, sustainability, and design excellence, signaling a new era for India’s urban residential landscape.

NCR’s Realty Market

According to ANAROCK’s latest report, on an annual basis, average housing prices in the top seven cities rose 8 per cent year-on-year, increasing from Rs 8,590 per sq. ft. at Q4 2024-end to about Rs 9,260 per sq. ft. by Q4 2025-end. Delhi-NCR outperformed all markets, registering a 23 per cent annual rise as prices jumped from Rs 7,550 to nearly Rs 9,300 per sq. ft in 2025.

Yash Miglani, Managing Director, Migsun Group, says, “As the year 2025 comes to a close, the Indian real estate industry has shown signs of remarkable resilience and a hold on demand, especially in the NCR. The middle, aspirational, and mixed-used projects have shown good numbers because of the enhancement in the infrastructure, stability in policies, and end-user sentiments. The Tier 2 cities and the new micro markets in the NCR are turning out to be engines for growth because of the enhanced connectivity and affordability. With the interest rates going favourable and the urban spending on the rise, 2026 will see a well-balanced performance in both the residential and commercial sectors.”

The year 2025 clearly showed that NCR is no longer a single-speed market, with residential and commercial segments performing unevenly across geographies.

“Supported by ongoing infrastructure development, realty markets such as Faridabad and Sonipat are increasingly becoming integral to the broader NCR residential landscape. Looking ahead to 2026, NCR’s growth is expected to remain nuanced, with established hubs consolidating further and emerging Tier-II extensions benefiting from spillover demand and long-term infrastructure visibility,” says Uddhav Poddar, CMD, Bhumika Group.

A major shift in the Delhi-NCR region has been driven by progress on the Dwarka Expressway and the Urban Extension Road. “These corridors have opened up new development pockets and significantly improved accessibility, encouraging both end users and investors to explore locations previously overlooked,” says Jitender Yadav, Director, Roots Developers.

Overall, 2025 saw sustained price appreciation across India’s premium and luxury residential segment, underpinned by strong end-user demand and tight inventory levels.

“Looking ahead, capital values are expected to continue rising at a measured pace, supported by timely project completions, infrastructure-led development, and closer alignment with evolving buyer preferences, rather than broad-based market momentum or speculative activity,” states Savills India’s Year End Report 2025.