Indian Real Estate Developers Show Resilience 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) poised to bring back investor interest.
Real EstateDevelopersMarketIndiaInvestmentReal EstateOct 01, 2025
High-level industry data till August suggests that volume demand increased year-on-year (YoY), although on a low base. This increase 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,” HSBC Global Investment Research said in a 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. 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. 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 the second quarter of the current financial year (Q2 FY26) poised to bring back investor interest.
How has the volume demand for real estate changed year-on-year?
Volume demand increased year-on-year (YoY), although on a low base, impacted by elections last year.
What factors are driving the strong response to new real estate launches?
The strong response to new real estate launches is driven by low unsold inventory, strong balance sheets, and large RERA cash balances, which generate confidence among home buyers.
What is the outlook for top residential developers according to the report?
The report remains constructive on top residential developers, noting that the pricing environment and upgrade demand in the premium segment remain buoyant, supporting margins.
What are the challenges faced by major real estate markets in India?
Major real estate markets in India, such as the National Capital Region (NCR), Mumbai Metropolitan Region (MMR), and Bengaluru, face challenges including fragility, oversupply, and concerns over IT job losses and the potential threat of artificial intelligence (AI).
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