Indian Real Estate Developers Remain Resilient Despite Market Challenges
Despite various unfavourable developments, the market for listed real estate developers in India remains healthy, with the second quarter of the current financial year (Q2 FY26) expected to bring back investor interest, according to a recent report.
Real EstateMarketDevelopersPresalesInvestor InterestReal Estate NewsOct 01, 2025
High-level industry data till August suggests that volume demand increased year-on-year (YoY), although on a low base, it was impacted by elections last year. Meanwhile, launches were still slow as developers avoided inauspicious days during the quarter.
Yet, our checks suggest that our covered developers combined pre-sales grew 64 per cent YoY, according to HSBC Global Investment Research in their report. The new launches largely received a strong response, allowing them to sell a significant part of the projects during the period.
According to the report, the sustenance sales were supportive and will be further supported by strong collections. We remain constructive on top residential developers. The pricing environment and upgrade demand in the premium segment (target market for listed developers) remain buoyant and support margins, the report stated.
Low unsold inventory and strong balance sheets, coupled with large real estate regulatory authority (RERA) cash balances, continue to generate confidence among home buyers, the report added. Large developers continue to gain market share driven by their ability to execute large and premium projects (which are in high demand).
Domestic press and influencers have been very negative on Indian residential real estate. All three large markets have been impacted by the shadow of negativity. Additionally, the headline numbers also indicated a 15 per cent YoY decline in units sold in Q1 FY26.
From a narrative perspective, while the National Capital Region (NCR) has been termed fragile and speculative, the Mumbai Metropolitan Region (MMR) is expected to be oversupplied with redevelopment projects, and Bengaluru is too weak on IT job losses and the potential threat of artificial intelligence (AI), the report noted.
Frequently Asked Questions
What is the current state of the Indian real estate market?
Despite various unfavourable developments, the market for listed real estate developers in India remains healthy, with volume demand increasing year-on-year.
How have pre-sales performed in the recent quarter?
Pre-sales for covered developers grew 64 per cent year-on-year, according to HSBC Global Investment Research.
What factors are supporting the real estate market?
Low unsold inventory, strong balance sheets, and large RERA cash balances are generating confidence among home buyers.
Which regions are facing challenges in the real estate market?
The National Capital Region (NCR), Mumbai Metropolitan Region (MMR), and Bengaluru are facing challenges due to various factors such as oversupply and IT job losses.
What is the outlook for the second quarter of the current financial year?
The second quarter of the current financial year (Q2 FY26) is expected to bring back investor interest, changing the perception of the market.
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