India’s Housing Market Slows Down, But Home Prices Continue To Rise Despite Falling Sales

Housing sales and new project launches have declined across India, but tighter inventory and cautious supply by developers are still keeping residential property prices elevated in major cities.

India’s housing market is showing signs of slowdown, but homebuyers waiting for property prices to fall may not get relief anytime soon. Fresh data from property market reports shows that housing sales and new project launches have weakened across the country, yet residential prices continue to rise due to shrinking unsold inventory and controlled supply by developers.

According to a JM Financial report on India’s residential property market for March 2026, pan-India housing sales declined 7 per cent year-on-year during the fourth quarter of FY26. New residential project launches witnessed an even sharper decline of 17 per cent during the same period.

However, despite slower buyer activity, unsold inventory across major cities fell by 5.1 per cent, helping developers maintain pricing power. Residential property prices still increased by 6.6 per cent year-on-year, although the pace of appreciation has slowed compared to the double-digit growth seen in FY25.

The report noted that housing demand remains softer than previous growth phases, but the decline in sales has moderated slightly. Sales had fallen 9.9 per cent in December 2025, while the March 2026 quarter saw a comparatively smaller drop of 7 per cent, indicating some stabilisation in buyer sentiment.

A separate PropTiger report stated that housing sales across India’s top eight cities declined 2 per cent year-on-year to 95,973 units during the January-March quarter of 2026. At the same time, prices continued rising across all major markets, raising concerns over affordability and long-term sustainability.

Mumbai Metropolitan Region (MMR) and Pune were among the worst-hit markets. Housing sales in MMR declined 15 per cent year-on-year to 26,116 units, while Pune recorded a sharper 21 per cent fall to 13,565 units despite ongoing infrastructure expansion.

Experts say rising land costs, shrinking affordable housing supply and increasing ownership expenses are pushing many middle-income buyers out of the market. Rahul Bahl, Managing Director of Krishna Buildestates, said several middle-income housing projects in NCR have become “nearly non-existent” due to rapidly rising land prices.

At the same time, developers are avoiding aggressive expansion and are focusing on measured launches instead of flooding the market with excess supply. Industry experts believe this strategy is helping prevent major price corrections even when demand is slowing.

“New launches weakened sharply to -17.0% YoY, suggesting developers remain cautious on fresh project additions,” JM Financial stated in its report.

The report also highlighted that developers now have stronger financial discipline because of institutional funding access, REIT-backed financing and tighter inventory management practices.

While several traditional housing markets are slowing, Bengaluru has emerged as the strongest-performing city during Q1 2026. The city recorded a 33 per cent rise in housing sales, largely driven by GCC expansion, startup growth and technology-sector employment opportunities.

Real estate experts believe infrastructure-led development and employment generation continue to support demand in emerging business corridors and peripheral growth areas.

Despite softer sales momentum, analysts say the housing market is not witnessing a collapse. Instead, developers are carefully managing supply while maintaining pricing stability in markets where inventory remains limited.

The reports suggest that unless supply rises significantly or affordability improves, home prices may continue staying firm even as sales growth remains under pressure.