India’s residential real estate market ended FY26 on a strong note, with mid-income and luxury housing emerging as the key growth drivers, according to a recent Elara Capital report. While premium home demand remained resilient, the affordable housing segment continued to face significant challenges due to weaker buyer sentiment and affordability concerns.
Homes priced between ₹1 crore and ₹3 crore recorded an 8% quarter-on-quarter increase and a 16% year-on-year rise in sales volumes. Meanwhile, the luxury housing segment, comprising homes above ₹3 crore, witnessed a 12% quarterly growth and a 9% annual increase in sales. In contrast, affordable housing registered a 7% decline quarter-on-quarter and a steep 21% drop year-on-year, highlighting the widening gap between market segments.
Among major cities, Bengaluru and Kolkata emerged as the strongest performers, delivering double-digit growth in both housing sales and new project launches. Bengaluru, in particular, witnessed robust demand for newly launched projects, while Gurugram experienced slower momentum due to reduced speculative buying.
The report also highlighted the growing dominance of organised and listed developers, who continued to outperform the broader market. Listed developers recorded stronger pre-sales, faster collections and lower inventory overhang, reflecting higher buyer confidence and efficient project execution.
Industry experts believe that improving infrastructure, rising disposable incomes and increasing demand for premium lifestyle homes will continue to support India’s residential real estate market, even as affordable housing requires stronger policy support to regain momentum.
