India’s residential real estate market recorded a slowdown in the first quarter of 2026, with housing sales declining 13% year-on-year to 98,761 units. This marks the first time in over 18 quarters that quarterly sales have fallen below the 1 lakh unit mark, according to recent industry data.
The decline reflects a moderation phase following sustained growth in previous years.
Quarterly Performance Overview
The dip in sales indicates a shift in market momentum across major cities.
Key Data Points
- Total Units Sold: 98,761
- Year-on-Year Decline: 13%
- Comparison Period: Q1 2025 vs Q1 2026
- Milestone: First sub-1 lakh quarter in 18 quarters
The slowdown comes after a prolonged period of strong residential demand driven by post-pandemic recovery.
Housing Sales Comparison Table
| Metric | Q1 2025 | Q1 2026 | Change |
|---|---|---|---|
| Units Sold | ~1,13,000+ | 98,761 | ↓ 13% |
| Market Trend | Growth Phase | Moderation Phase | – |
| Quarterly Benchmark | Above 1 lakh | Below 1 lakh | Significant Dip |
Factors Influencing the Decline
Primary Reasons Identified
- Higher property prices in key metro cities: Double-digit price growth in cities like Bengaluru and Delhi-NCR has begun to test buyer affordability.
- Elevated interest rates impacting affordability: Borrowing costs have remained a critical factor for homebuyer sentiment.
- Supply-demand recalibration: A shift toward larger home sizes and premium configurations has changed the volume of units hitting the market.
- Buyer caution amid global and economic uncertainties. These factors have contributed to a temporary slowdown in transaction volumes.
These factors have contributed to a temporary slowdown in transaction volumes.
City-Level Trends and Demand Patterns
While overall sales declined, demand remained relatively stable in select micro-markets.
Observed Trends
- Premium housing segments continue to see traction
- Mid-income segment experiencing cautious demand
- Metro cities remain dominant contributors
- Inventory levels adjusting across regions
Developers are expected to align supply with evolving buyer preferences.
Real Estate Impact: Market Implications
The decline in sales could influence short-term strategies across the real estate sector.
Potential Impacts
- Developers may pace new project launches
- Increased focus on pricing strategies and offers
- Stabilisation of property price growth
- Higher emphasis on end-user demand over investor-led sales
- Shift towards quality and premium developments
Despite the slowdown, the broader residential market remains structurally stable.
Outlook for the Housing Sector
The current dip is viewed as part of a cyclical adjustment rather than a long-term downturn. Market activity is expected to stabilise as interest rates and pricing trends evolve over the coming quarters.
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