Summary of this article
Mumbai, NCR, Pune lead sales decline
Supply exceeds demand for 14 quarters
Premium housing drives overall market activity
The Indian residential real estate market has been showing early signs of slowdown in the first quarter of 2026. Housing sales declined by 4 per cent on a year-on-year basis to 84,827 units across the top eight cities. This downward trend could be noticed from January 2026, when the housing sales fell below 1 lakh units for the very first time in the last 18 quarters for the month. This dip reflects a broader consolidation trend after a strong performance in 2025. The price rise was seen while the buyer sentiment began to turn cautious. While the decline seems to be modest, the underlying trends point to a shifting market dynamic. One where supply continues to outpace the demand, affordability pressures intensify and the growth is driven by premium housing demands.
Demand Across Key Cities
Upon breaking down city-wise decrease, the slowdown was led by some of the largest markets, such as the Mumbai Metropolitan Region (MMR). Mumbai is India’s biggest residential market, which recorded a 7 per cent year-on-year decline in sales, with only 23,185 units being sold in the Q1 of 2026. The National Capital Region (NCR) and Pune have witnessed a sharper decline in the matter, both of them decreasing by 11 per cent. NCR recorded 12,734 units being sold, while Pune witnessed sales of 12,711 units during this quarter.
On the other hand, southern markets have shown resilience. Bengaluru has registered a 5 per cent increase in sales, while recording total sales of 13,092 units. Whereas Chennai saw a 9 per cent growth, at the same time Hyderabad remained stable with its 1 per cent growth. In smaller markets like Ahmedabad and Kolkata, moderate gains of 2 per cent and 5 per cent, respectively. This indicates that the market has not slowed down geographically.
Supply Outpaces Absorption
One of the most critical reasons behind this decline is the persistent oversupply. Developers have been giving out more units than can be absorbed by the buyers for the 14th consecutive quarter. The gap between supply and absorption has widened to over 10,000 units, which is the highest since Q1 2023.
While new launches have declined in most markets, the NCR witnessed the sharpest decline with a decline of 8 per cent on a yearly basis. Hyderabad and Kolkata followed the same trend by dropping sales by 6 per cent. However, Bengaluru, Chennai, and Ahmedabad have gone against the trend with increased launch activity.
Premium Housing Activity
A defining feature of the Q1 2026 was the dominance of the high-ticket and premium homes. Sales of properties priced above Rs 1 crore have grown by 11 per cent on a year-on-year basis, even if the affordable and mid-segment homes have decreased sharply. The segment which ranges below Rs 50 lakh saw a sharp decline of 23 per cent, while the segment of Rs 50 lakh to Rs 1 crore has dropped to 47 per cent of the total sales, as compared to 54 per cent from last year. This shift underscores a divide in the market; affluent buyers who continue to drive the demand as affordability suppresses the volume growth in the lower price brackets.
