India's Housing Market: A Tale of Luxury and Risk
India's residential real estate market is witnessing unprecedented growth in sales value, driven by luxury segments. However, flat unit sales volumes and a construction slowdown pose significant risks.
Real EstateLuxury HomesConstruction SlowdownMarket StabilityUnsold InventoryReal EstateNov 13, 2025
The report, covering 75 cities and analysing over 32,000 housing projects, finds that while overall sales value jumped 15% year-on-year on the back of soaring luxury purchases and a 3% rise in national housing prices, unit sales volumes remained flat (0% YoY). Simultaneously, the construction pace has fallen to an eight-year low, raising alarms about delivery delays, execution risks, and a potential market imbalance.
The biggest engine of value growth is the luxury and ultra-luxury market. Key sales trends include a sales value of ₹8,27,764 crore (↑15% YoY), sales volume of 6,54,016 units (0% change YoY), new supply of 5,22,955 units (↓10% YoY), unsold inventory of 10,11,681 units (↓7% YoY), and a National Price Index of 201 (↑3% YoY).
Luxury and ultra-luxury homes recorded unprecedented momentum. Category-wise YoY sales growth includes:
- ₹2–5 crore homes: ↑25%
- ₹5–10 crore homes: ↑19%
- >₹10 crore homes: ↑40% — the fastest-growing segment
- ₹1.5–2 crore segment: ↑20%
- ₹1–1.5 crore segment: ↑11%
Meanwhile, budget categories weakened sharply:
- Affordable ₹30–40 lakh: ↓13%
- ₹40–50 lakh: ↓10%
- Mid-segment ₹50–75 lakh: ↓7%
- ₹10–30 lakh priority homes: ↓21%
“The surge in high-value transactions propelled the total sales value to ₹8.27 lakh crore, masking flat unit sales across the country,” said Pankaj Kapoor, MD, Liases Foras. “The current growth cycle is highly concentrated at the top end of the market.”
The report clearly states that India’s residential market has reached its peak. Q1 FY26 sales: ↓3% quarter-on-quarter, and Q2 FY26 sales: ↓1% quarter-on-quarter. This early slowdown follows record activity in FY24 and FY25.
The most critical finding of the Q2 FY-26 report is the notable slowdown in the construction pace across the top eight cities, posing a significant risk to future deliveries and market stability. The percentage of constructed supply against the total marketable supply has dropped dramatically from 75% in 2017 to just 57% in 2025.
“This widening gap between the promises of new launches and physical delivery is a serious concern. It implies slower revenue recognition for builders, increased execution risk, and greater potential for project delays,” the spokesperson added. “While builders’ commitments have soared, their delivery capacity has not kept pace, suggesting the current high sales volumes are not being matched by equivalent housing stock production.”
The report draws a historical parallel with 2006–08, when a similar gap occurred amid high interest rates and price surges.
Regionally, MMR and NCR continue to dominate. MMR leads India in sales and pricing strength with a 26% share of India’s total sales value, 8% YoY growth in unit sales, and prices ↑3% in Greater Mumbai and ↑4% in Navi Mumbai. NCR shows high value but the highest risk, with 45% of unsold inventory classified as “stalled.” Prices ↑6% in Gurgaon and ↑10% in Ghaziabad.
City-level insights reveal:
- Chennai: unsold inventory ↑18%, highest overhang at 29 months
- Bangalore: unsold inventory ↑4%
- Kolkata: unsold inventory ↓21%
- Tier-2 cities: sales volume ↓12% but new supply stable (0% YoY)
Months of inventory (Top 8 cities):
- Chennai – 29 months
- Ahmedabad – 25 months
- MMR – 21 months
- NCR – 12 months (lowest)
New supply has shrunk, but builders keep launching high-end projects. Top metros saw a 13% YoY drop in new supply, while Tier-2 markets remained flat. City-wise new supply YoY includes:
- Chennai: ↑74% — strongest expansion
- Hyderabad: ↓31%
- Pune: ↓10%
- MMR: ↓14%
- Ahmedabad: ↑1%
- NCR: ↓4%
Prices rose across most markets. On a project-level analysis:
- 90% of projects registered price growth between 0–10%
- 5% saw a drop
- Tier-2 cities saw 5% of projects rising above 10%
Top price gainers:
- Ghaziabad: ↑10%
- Bangalore: ↑7%
- Noida/Greater Noida: ↑6%
- Gurgaon: ↑6%
- Delhi: ↑5%
The Indian housing market is simultaneously hitting peak valuations and peak structural stress. Positive indicators include record sales value, robust luxury demand, strong price growth, and falling unsold inventory. However, risks are intensifying:
- Construction pace falling sharply
- High concentration of sales at the luxury end
- Stagnating volumes
- Rising inventory overhang in key markets
- High stalled inventory in NCR
- Shrinking affordability across segments
As Liases Foras concludes, “The housing stock being produced is not keeping pace with the strong growth in launches and sales, creating a structural risk for the market.” India’s next phase of real estate growth will depend heavily on whether developers can bridge the widening construction gap — or whether the market’s hidden fault lines begin to slow the momentum of one of its strongest ever cycles.
Frequently Asked Questions
What is the current trend in India's residential real estate market?
India's residential real estate market is showing robust growth in sales value, driven by the luxury segment, but unit sales volumes remain flat and the construction pace has slowed significantly.
What are the key risks in the current real estate market?
Key risks include a sharp construction slowdown, high concentration of sales at the luxury end, stagnating unit sales volumes, and rising inventory overhang in key markets.
Which regions are leading in sales and pricing strength?
MMR (Mumbai Metropolitan Region) leads India in sales and pricing strength, while NCR (National Capital Region) shows high value but the highest risk with a large amount of stalled inventory.
How is the new supply trend in top metros and Tier-2 cities?
Top metros saw a 13% YoY drop in new supply, while Tier-2 markets remained flat. Chennai saw the strongest expansion with a 74% increase in new supply.
What are the top price gainers in the real estate market?
Top price gainers include Ghaziabad (↑10%), Bangalore (↑7%), Noida/Greater Noida (↑6%), Gurgaon (↑6%), and Delhi (↑5%).
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