Summary of this article
Housing sales across eight cities remain steady year-on-year.
Rising prices and borrowing costs are affecting affordability.
Experts warn buyers against misleading offers and payment frauds.
India’s residential real estate market is expected to maintain stable housing demand during the 2026 festive season. This is despite growing affordability pressures while also witnessing a moderation in sales growth. In a conversation with Outlook Money, Vivek Rathi, National Director, Research, Knight Frank India, highlighted that homebuyer sentiment remains positive; rising prices and borrowing costs are making purchasing decisions increasingly challenging, while keeping the market’s growth momentum in check.
“For a homebuyer, for the first nine months of 2026 across the top eight cities, we largely recorded about 260,000 housing unit sales, which is just the same as last year. At these levels, the market continues to maintain a larger scale, albeit growth has waned when we see the past six-year trend in this housing upcycle. What this means is that, on one hand, the home-buying sentiment continues to remain positive. On the other hand, with increased headwinds, buyers are finding it a little challenging to commit, which is why the market is not growing as well as it was in the early part of this cycle,” says Rathi.
What can buyers expect this festive season?
The market is demonstrating resilience rather than signs of a significant slowdown. Residential property prices have also increased, however, at a modest pace. Even during Navratri, Mumbai recorded only a marginal decline of around 3 per cent to 4 per cent in housing sales. This indicates that demand remains relatively stable.
The expected outlook for the festive season is relatively stable, with some markets quite likely to witness marginal gains while others can experience a slight decline. Positive homebuying sentiment continues to support demand, especially among the buyers who can manage the higher cost of property ownership.
What Are The Challenges During This Time?
Affordability remains a significant challenge. After witnessing considerable property price increases over the past few years, prospective homebuyers are relying on alternative financial sources to fund their purchases. These include mutual fund investments, provident fund savings, gold, insurance proceeds and financial assistance from family members.
What are the warning signs for buyers?
“The common warning signs are fairly consistent. Prices well below the micro-market average, 'limited-period' guaranteed-return schemes, and reluctance to share documents in writing all deserve a pause. On payments, buyers should pay only through traceable banking channels, and only to the developer's RERA-designated project account. Cash components, or payments to individual or personal accounts, are a red flag in any season,” says Rishe Singh, Founder and CEO, SIlverdrome Realtors.
What’s the story on the developer’s side?
As for the supplier side, developers remain relatively well-positioned in terms of their balance sheets and project execution capabilities. Housing launches have continued to exceed sales demand over the past two to three years. This suggests that developers are optimistic about the market’s demand potential. With the festive season approaching, developers are also introducing promotional schemes that have flexible payment plans, which make home purchases manageable. These offers reflect that industry stakeholders recognise the growing challenges with affordability.
However, one can not expect the prices to reduce exponentially. Developers generally prefer to maintain quoted prices to avoid negatively affecting existing homeowners while also fixing market sentiment.
Looking beyond this festive season, the residential market’s performance will depend partly on the geopolitical developments and their implications for monetary policy and borrowing costs.
It was emphasised that Tier II and Tier III cities can experience stronger momentum due to their individual economic drivers; housing demand is expected to remain concentrated in major markets such as Bengaluru, Hyderabad, Pune and the Mumbai Metropolitan Region.
“Affordable housing also remains an area of concern. Government-linked benchmarks generally place affordable housing within the price range of approximately Rs 45 lakh to Rs 65 lakh, depending on the classification. However, the share of affordable housing in the top markets has declined significantly, from around 50 per cent six years ago to approximately 18 per cent-19 per cent currently,” adds Rathi.
Indian housing market is expected to remain resilient this festive season. However, sustaining the demand beyond the festive period will also depend on the developer’s ability to address affordability-related issues.
