Mumbai to Bengaluru: Residential Sales Dip 3% but Luxury Homes Thrive, ICRA Reports
Residential sales in India's top seven metropolitan cities are expected to decline by 3% in FY26, according to ICRA. However, the luxury segment is showing resilience and growth.
Residential SalesReal EstateIcraLuxury HomesMetropolitan CitiesReal Estate MumbaiSep 11, 2025
From FY23 to FY25, the average selling price for residential units has risen by 10 per cent. The price rise has hit the affordability for home buyers, ICRA added. The total residential sales across Mumbai, Delhi, Bengaluru, Hyderabad, Pune, Chennai, and Kolkata are expected to be around 620-640 million square feet in FY26.
ICRA says that the residential real estate market in the seven biggest metropolitan cities of India still remains in the stabilising phase after a challenging FY25. The new projects launched in the seven cities declined 14 per cent in FY25.
However, the new project launches are expected to bounce back. ICRA estimates that new product launches may increase by 4 – 7 per cent in FY26 to a total of 630-650 million square feet. Anupama Reddy, Co-Group Head & Vice President– Corporate Ratings, ICRA, said that calibrated launches by developers helped in maintaining a comfortable inventory level, despite a moderation in sales momentum in the broader residential market.
“The years-to-sell (YTS) metric is estimated to remain healthy at 1-1.1 times by March 2026. The ASP rose by 16% in FY2025 and is projected to further increase by 6-8% in FY2026,” Reddy added.
While the mid-price segment sales have suffered dual constraints of low product launch and price increase, the luxury segment sales, in terms of area, increased by 6 per cent in FY25. The trend continued in the first quarter of FY26. Reddy added that the projected growth is being driven by the increasing share of the luxury segment, low inventory overhang, and comfortable YTS, as well as consolidation in the industry with better pricing power for the prominent listed developers.
Frequently Asked Questions
What is the expected decline in residential sales in the top seven metropolitan cities in FY26?
Residential sales in the top seven metropolitan cities are expected to decline by 3 per cent in FY26, according to ICRA.
Which cities are considered in the ICRA report?
The cities considered in the ICRA report are Mumbai, Delhi, Bengaluru, Hyderabad, Pune, Chennai, and Kolkata.
What is the main reason for the decline in residential sales?
The main reason for the decline in residential sales is the rise in average selling prices, which has hit affordability for home buyers.
How much are new project launches expected to increase in FY26?
New project launches are expected to increase by 4-7 per cent in FY26, according to ICRA.
Why is the luxury segment performing well despite the overall market challenges?
The luxury segment is performing well due to an increasing share, low inventory overhang, comfortable years-to-sell (YTS) metric, and consolidation in the industry with better pricing power for prominent listed developers.
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