Housing Sales in Top 7 Indian Cities Drop 7% in Q1 2026 Amid Middle East Tensions

The residential real estate market in India has recorded a mixed performance in the first quarter of 2026, with sales declining in the quarter but increasing on an annual basis, as per data from ANAROCK Research. According to Anuj Puri, Chairman of ANAROCK Group, geopolitical uncertainty played a key role in dampening quarterly performance, with Middle Eastern investors—significant contributors to Indian real estate—adopting a cautious stance during the period.

The housing sales in the top seven cities in India recorded a fall of 7 per cent in quarterly sales to reach approximately 1,01,675 units in Q1 2026 from 1,08,970 units in Q4 2025. In addition, sales in value recorded a fall of 5 per cent in quarterly sales to reach Rs. 1.51 lakh crore from Rs. 1.60 lakh crore in Q4 2025.

On an annual basis, India’s residential real estate market recorded an increase in sales, with sales increasing by 9 per cent from approximately 93,280 units in Q1 2025. In addition, sales in value recorded an increase of 6 per cent from Rs. 1.42 lakh crore.

Middle East tensions weigh on sentiment According to Anuj Puri, Chairman, ANAROCK Group, geopolitical uncertainty played a key role in dampening quarterly performance, adding that Middle Eastern investors—significant contributors to Indian real estate—adopted a cautious stance during the period. “While India’s residential segment’s long-term fundamentals remain strong, the short-term tremors of the Iran War were clearly visible in the first quarter. The 7 per cent dip in sales tracks the war-induced uncertainty, with sentiment and sales clearly affected by surging oil and construction prices—particularly in March. The decline also aligns with large numbers of prospective Middle Eastern homebuyers, who invest significantly in Indian real estate, hitting the pause button under the war cloud,” Puri said.

Housing sales trends in the top 7 cities The Mumbai Metropolitan Region (MMR) and Bengaluru together accounted for nearly 48 per cent of total housing sales in Q1 2026, continuing to drive overall market activity. Among cities, Chennai stood out with contrasting trends—it recorded the steepest QoQ sales decline of 18 per cent, yet posted the highest annual growth of 31 per cent. Other major markets also saw sequential declines: Pune: down 10 per cent QoQ, NCR: down 8 per cent, Kolkata: down 8 per cent, Bengaluru: down 5 per cent, and Hyderabad: largely stable.

New launches outpace sales Another key trend this quarter is that new launches have started outpacing sales, reversing the post-pandemic pattern when sales were usually higher, adds Puri. As a result, unsold inventory has increased 4 per cent quarter-on-quarter and 7 per cent year-on-year, with total stock across the top 7 cities now above 6 lakh units. Developers remained active, with new launches rising 2 per cent QoQ and 26 per cent YoY to about 1,26,265 units in Q1 2026. MMR and Bengaluru alone contributed 51 per cent of the total new supply. Hyderabad took the lead with a robust 46 per cent QoQ growth in launches. Bengaluru and MMR followed with 7 per cent and 6 per cent QoQ growth in launches. On the flip side, Chennai, NCR, Pune, and Kolkata saw QoQ decreases in new launches.

Premiumisation of supply continues The supply mix also continued to favour higher-priced properties: Rs 1.5–2.5 crore segment: 32 per cent share, Above Rs 2.5 crore: 20 per cent, Rs 80 lakh–1.5 crore: 25 per cent, Rs 40–80 lakh: 12 per cent, Below Rs 40 lakh: only 10 per cent. This indicates sustained focus on premium and luxury housing across major markets.

Unsold inventory rises above 6 lakh units As supply has outgrown absorption, unsold inventory grew by 4 per cent QoQ and 7 per cent YoY to over 6.01 lakh units by the end of Q1 2026. Bengaluru has seen the highest growth in unsold inventory, increasing by 12 per cent QoQ and 24 per cent YoY, followed by Hyderabad, which has seen an increase of 7 per cent QoQ.

Prices continue upward trajectory Despite softer quarterly sales, property prices remained firm. Average residential prices across the top cities rose 2 per cent QoQ and 7 per cent YoY. NCR led annual price growth with up to 15 per cent appreciation, driven largely by luxury and ultra-luxury housing supply, followed by Bengaluru with an 8 per cent increase.