Amid affordability concerns, the usual festive frenzy  has given way to tempered fervour . As the housing market braces for a dimmer Diwali, homebuyers are shifting  from impulsive auspicious buying to a measured approach, prioritising real value over seasonal hype.

–Vinod Behl

The alarm bells started ringing for developers in a run up to Diwali with tepid response during Navratri. Overall, the first nine months of the year saw flat housing sales while price-sensitive segments registered decline in sales. The September quarter saw sales falling by 12% YoY for homes priced below INR 50 lakh and 8% for homes costing between INR 1 crore.

Amid  mismatch in  aggressive launches and sales , the unsold inventory  has been steadily rising, registering 5% YoY increase in September. Inventory in the price bracket above INR 1 crore rose around 20% against sales growth of 7%. In the INR 2-5 crore price segment, inventory grew 37% against the sales growth of 20%.

With affordability as the key consideration , homebuyers are looking at the real long-term value the home provides  in terms of location, connectivity, quality of construction, lifestyle amenities and social infrastructure in and around the micro-market which decides the livability quotient of the property.

Flexible payment schemes offered by the developers are though  appealing to the homebuyers ,especially in view of the recent 25 bps rate hike, yet these payment plans are not the ultimate clincher as they don’t make homes affordable or make borrowing cheaper. The prospects of another interest rate hike in December may further precipitate matters . Stung by high home prices and increased interest rates, homebuyers are not finding even good bargains as developers are protecting their margins in view of high construction costs.

However,what is working for  developers is the trend of premium/luxury  housing dominating the residential market. This segment remains largely resilient. During January- September period, the INR 2-5 crore segment saw 8% growth in NCR , with strong momentum nationally. According to CRE-Matrix , homes worth INR 1.5 lakh crore were sold  in the INR 2-5 crore  price bracket during the first half of 2026. The INR 10-20 crore segment grew 16% nationally during the nine months of CY 2026. The market consolidation in favour of big branded A-grade listed developers is also a positive trend for the housing market. Top listed developers are heading for INR 1.82 lakh crore of annual pre-sales for FY27.  Further, the shift from investors/speculators to end-users is working well for the housing market. 

This festive season real estate developers are banking big on NRIs to boost their residential sales. NRIs are making most of the rupee arbitrage to boost their purchasing power. They are also taking advantage of the recent policy and regulatory reforms to streamline property transactions and investments for NRIs. As NRIs are looking for premium new-age lifestyle homes, developers are giving them a wide choice of residential properties in the preferred price range of INR 1.5-3 crore, promising double digit price appreciation(average 15% in NCR) and average  4% rental yield .

 Amid these mixed  festive signals , the road ahead for residential real estate will largely depend on the state of economy, interest rate cycle and what the upcoming budget holds for the housing sector. Home loan demand is a key to the health of the housing sector. Housing finance experts like Sandeep Kumar , MD & CEO, LIC Housing Finance are of the view that further rate hikes may hit housing loan demand though there are no signs of a slowdown in the sector. Budget boost to housing , particularly budget and mid-priced housing will hold key to the residential demand in the year ahead.