The residential market which witnessed marginal decline in sales and significant rise in sales value due to increasing number of high value transactions, largely remained resilient in FY26. The high point of the housing market has been that it’s becoming more broad-based with the rise of small and regional developers and Tier 2-3 cities. 

According to the latest report by real estate research agency – Leases Foras, sales showed resilience, new supply rose sharply, indicating broad-based market expansion and emerging execution risks. 

Housing sales across 75 cities, as per the report declined only marginally by 1% year-on-year. Despite the slight volume dip, total sales value rose nearly 16%, reflecting a continued cycle of premium housing and higher-value transactions. City-level performance was mixed, NCR emerged as the strongest performer with 11% sales growth, while Ahmedabad and Bangalore also witnessed healthy momentum. MMR, contributing 24% of pan-India sales, registered moderate growth of 4%. In contrast, Pune recorded the sharpest decline at ~25%, while Tier-II and Tier-III cities collectively fell 4%.

The supply side was the defining story of FY’26. The year closed with a landmark quarter — recording the highest-ever quarterly supply addition of approximately1.72 lakh new units. The top eight metropolitan cities led this expansion, contributing 1.22 lakh units at 12% QoQ growth, while Tier-II and Tier-III cities. Added close to 50,000 units at 10% QoQ growth. For the full year, new launches rose 10%, underscoring the increasingly broad-based nature of India’s residential expansion. This supply momentum has pushed unsold inventory to nearly 12 lakh units, with monthly overhang at 20 months for Tier-I and 19 months for Tier-II/III cities —levels that remain within healthy thresholds.

Housing prices continued to strengthen, with the pan-India price index rising 3% YoY. NCR outperformed, with Ghaziabad appreciating up to 9% and Bangalore at 7%. Pan India, 61% of projects recorded 0–10% price growth, while 17% exceeded 10% appreciation.

However, construction activity has not kept pace with supply additions. Project execution delays and slower construction progress across several regions, combined with aggressive new launches and rising unsold inventory, point to emerging execution risks in certain market pockets.

One of the most notable trends emerging from the latest residential market data is the increasing participation of smaller and regional developers. This indicates that the market is becoming more broad-based, rather than remaining concentrated among a limited number of large players. The distribution of new housing supply across developer categories highlights a more balanced market structure, with 59 mega large developers contributing 18% of the total new launches, accounting for nearly 1.1 lakh units during the period. Smaller developers collectively contributed nearly 1.81 lakh units (29%), surpassing larger players in terms of total unit contribution.

The expansion was also visible in the overall developer base. The number of active developers increased significantly to around 17,679 active developers in the market throughout the year. This trend suggests that the post-pandemic phase of market consolidation may now be moderating, with smaller regional developers gradually re-entering the market as housing demand stabilizes and financing conditions improve.

Supply trends also indicate a revival in the mid-income housing segment, challenging the broader perception that residential launches are dominated only by luxury and ultra-luxury projects going forward. Pricing trends indicate three key segments driving supply. Rs 50 lakh- Rs 5 crore segment emerged as the dominant supply range. The Rs 1 crore- Rs 1.5 crore segment recorded the largest contribution to overall launches- 83430 launches. The Rs 50 lakh- Rs 75 lakh segment emerged as the third largest contributor reflecting renewed activity in relatively affordable mid-segment housing. Importantly, affordable housing activity also remained visible in the market with nearly 34000 units priced below Rs 30 lakh were launched during this period. 

The residential supply, as per the data, is now becoming more diversified across price categories, with developers targeting a wider buyer base rather than focusing exclusively on premium housing segments.