Demand for mid-income and luxury homes helped India’s residential market remain resilient during the fourth quarter of FY26, even as the affordable housing segment continued to witness a sharp decline, according to a report by Elara Capital.

The report said homes with ticket sizes between Rs 1 crore and Rs 3 crore registered an 8 per cent quarter-on-quarter rise and a 16 per cent year-on-year increase in sales volumes. Luxury housing, comprising homes priced above Rs 3 crore, also maintained momentum, with sales rising 12 per cent sequentially and 9 per cent annually.

In contrast, affordable housing, where the average ticket size is below Rs 1 crore, recorded a 7 per cent quarter-on-quarter decline and a steeper 21 per cent drop compared to the year-ago period.

Overall, housing absorption across Tier-I cities increased 4 per cent on a quarterly basis and remained broadly flat year-on-year in Q4 FY26, with demand largely supported by the mid-income and luxury segments.

Among major markets, Bengaluru and Kolkata outperformed other cities, registering double-digit growth in housing sales on both quarterly and annual bases. Bengaluru also recorded the strongest improvement in new launch take-up during the quarter, indicating healthy demand for newly launched projects.

The National Capital Region, however, witnessed softer demand as speculative buying moderated. Gurugram saw a sharp decline in project take-up, while inventory overhang increased by three months, reflecting relatively slower sales momentum despite sustained demand for select projects.

The report noted a divergence in luxury housing performance across cities during FY26. Gurugram recorded a 15 per cent year-on-year decline in luxury home sales, while Bengaluru posted a 55 per cent increase, accounting for nearly 30 per cent of the overall growth in luxury housing sales during the year.

Large organised developers continued to strengthen their market position, with their share in housing absorption and value increasing during FY26. Listed developers also outperformed the broader market, reporting 21 per cent year-on-year growth in presales, compared with an 8 per cent increase for the overall industry. Collections rose 18 per cent, while inventory overhang remained lower than that of unlisted developers.