In a surprising turn for India’s residential real estate market, housing sales across the top 7 cities witnessed a 7% quarter-on-quarter (Q-o-Q) decline in Q1 2026, raising fresh concerns about short-term demand stability—even as the market continues to show resilience on a yearly basis.
According to the latest ANAROCK Research data, approximately 1,01,675 units worth over ₹1.51 lakh crore were sold in Q1 2026. This marks a notable drop from 1,08,970 units worth ₹1.60 lakh crore in Q4 2025. However, on a year-on-year (Y-o-Y) basis, sales still recorded a 9% increase compared to 93,280 units worth ₹1.42 lakh crore in Q1 2025, indicating that the long-term momentum remains intact.
War Impact and Buyer Sentiment Shift
The dip in quarterly sales is being attributed largely to global geopolitical tensions, particularly the ongoing Middle East conflict. The uncertainty has impacted buyer sentiment, increased construction costs, and led to hesitation among investors—especially those from the Middle East who traditionally contribute significantly to Indian real estate.
ANAROCK Chairman Anuj Puri noted that the “war-induced uncertainty, rising oil prices, and increased construction costs” played a crucial role in dampening housing demand, particularly toward the end of the quarter.
MMR & Bengaluru Dominate, Chennai Shows Contrasting Trend
City-wise, Mumbai Metropolitan Region (MMR) and Bengaluru together accounted for 48% of total housing sales in Q1 2026, maintaining their dominance.
- MMR: ~32,800 units sold (↓6% Q-o-Q)
- Bengaluru: ~16,440 units (↓5% Q-o-Q)
- Pune: ~15,300 units (↓10% Q-o-Q)
- NCR: ~15,190 units (↓8% Q-o-Q)
- Hyderabad: ~12,425 units (flat growth)
Interestingly, Chennai recorded the sharpest quarterly drop of 18%, but also posted the highest annual growth of 31%, highlighting a strong recovery trend over the year. Kolkata also saw an 8% quarterly dip.
New Launches Rise, Supply Outpaces Demand
While sales slowed, developers continued to push supply into the market.
- New launches rose 2% Q-o-Q and 26% Y-o-Y
- Total new supply stood at 1,26,265 units in Q1 2026
MMR and Bengaluru together contributed 51% of total new supply, followed by Hyderabad, Pune, and NCR.
Key City Trends:
- Hyderabad: Highest supply jump (↑46% Q-o-Q)
- Bengaluru: ↑7%
- MMR: ↑6%
- Chennai: ↓28%
- NCR: ↓17%
- Pune: ↓9%
- Kolkata: ↓10%
This divergence indicates that developers are betting on long-term demand, even as short-term absorption slows.
Luxury Housing Dominates New Supply
A clear shift towards premium housing continues:
- ₹1.5–2.5 Cr segment: 32% of new supply
- Above ₹2.5 Cr: 20%
- ₹80 lakh–₹1.5 Cr: 25%
- ₹40–80 lakh: 12%
- Below ₹40 lakh: Just 10%
This shows that affordable housing is shrinking, while luxury and upper-mid segments are driving the market.
Unsold Inventory Crosses 6 Lakh Units
With supply exceeding absorption, inventory levels have started rising again:
- Unsold stock increased 4% Q-o-Q and 7% Y-o-Y
- Total inventory stands at over 6.01 lakh units
Bengaluru recorded the highest inventory surge:
- ↑12% Q-o-Q
- ↑24% Y-o-Y
Hyderabad followed with a 7% quarterly rise.
This marks a reversal of the post-pandemic trend, where sales had consistently outpaced supply.
Property Prices Continue to Rise
Despite the sales dip, prices continue their upward trajectory:
- 2% Q-o-Q increase
- 7% Y-o-Y growth across top cities
Top performers:
- NCR: Up to 15% annual increase (driven by luxury supply)
- Bengaluru: 8% rise
The steady price growth indicates that developers are not under pressure to discount yet, despite rising inventory.
What This Means for the Market
The Q1 2026 data presents a mixed picture:
- Short-term caution: Sales slowdown due to global uncertainty
- Long-term strength: Strong annual growth and rising prices
- Emerging risk: Inventory build-up as supply outpaces demand
The biggest structural shift is clear—India’s housing market is becoming increasingly premium-focused, potentially sidelining affordable buyers.
If geopolitical tensions persist and interest rates remain elevated, the coming quarters could see further pressure on demand, even as supply remains robust.
Also Read: Housing Sales Dip 58% Q-o-Q Amid 2nd Wave
