In the first quarter of 2026, India's residential real estate market slowed down as the global tensions, especially the US-Iran conflict, impacted the buyers' mood negatively. As per the latest report from ANAROCK Research, housing sales across the top seven Indian cities came down by 7% QoQ, indicating a temporary disturbance in a strong sector.
Sales Decline Across Major Cities
Sales dipped across major cities in Q1 2026. About 1,01,675 units worth 1.51 lakh crore were sold, down from 1,08,970 units worth 1.60 lakh crore in Q4 2025. Homebuyers and investors stayed cautious amid rising uncertainty.
The Mumbai Metropolitan Region and Bengaluru drove nearly 48% of total sales. MMR led with 32,800 units - a 6% drop from the prior quarter. Bengaluru sold around 16,440 units, down 5%. Pune's sales fell by 10%, NCR dropped 8% Hyderabad stayed flat. Chennai saw a sharp plunge - nearly 18% less than the previous quarter.
Kolkata also declined by 8%. The slowdown wasn't limited to one area. But it spread widely across regions, each city reacted differently but none escaped the pressure.
New Launches Continue to Rise
The weakening of sales has not impacted the confidence of the developers in the long-term potential of the real estate market. The total new launches in Q1 2026 have been recorded to be 1,26,265 units, an increase of 2% over the previous quarter and a notable increase of 26% over Q1 2025.
Hyderabad has recorded the highest new launches, which have increased by a notable 46% over the previous quarter. Bengaluru and MMR have also recorded an increase of 7% and 6%, respectively. On the contrary, cities such as Pune, NCR, Chennai, and Kolkata have recorded a decline in new launches.
This is in contrast to the previous scenario in the market, when the sale of properties was higher compared to the new launches recorded in the real estate market.
Price Trends and Market Segmentation
Interestingly, prices have continued to rise in the residential market, though at a moderate rate. On average, prices have risen by 2% QoQ and 7% year on year in the top cities.
NCR and Bengaluru have emerged as the top markets in terms of annual price appreciation, growing by over 15% and 8%, respectively. This has largely been driven by the expansion of luxury and ultra-luxury products.
In terms of segmentation of new supply, properties in the range of ₹1.5 crore to ₹2.5 crore have emerged as the largest segment at 32%. Properties above ₹2.5 crore have accounted for 20%, while mid-range properties in the range of ₹80 lakh to ₹1.5 crore have accounted for 25%. Affordable housing continues to decline, with properties below ₹40 lakh accounting for only 10%.
Rise in Unsold Inventory
The widening gap in the supply of housing and the decline in sales have resulted in the increase in the amount of unsold inventory. The total amount of unsold housing in the top seven cities crossed 6.01 lakh by the end of Q1 2026.
The total inventory rose by 4% QoQ and 7% YoY. Bengaluru experienced the highest increase in the amount of unsold housing, with a 12% increase in the total inventory QoQ and a high 24% increase YoY.
Industry experts have stated the major cause of the slowdown to be the global geopolitical situation and its impact on the economy.
“While India’s residential segment’s long-term fundamentals remain strong, the short-term tremors of the Iran War were clearly visible in the first quarter. The 7% dip in sales tracks the war-induced uncertainty, with sentiment and sales clearly affected by surging oil and construction prices - particularly in March. The decline also aligns with large numbers of prospective Middle Eastern homebuyers, who invest significantly in Indian real estate, hitting the pause button under the war cloud,” said Anuj Puri, Chairman, ANAROCK Group.
He further added, “Another key trend this quarter is that new launches have started outpacing sales, reversing the post-pandemic pattern when sales were usually higher.”
Though the current scenario is a result of short-term caution, the long-term prospects for the real estate sector in India look promising. The economic indicators of the country are strong, and along with this, the real estate sector is also benefiting due to urbanisation and rise in income levels. But the rate and speed of the real estate sector’s recovery depend on the resolution of global tensions and restoration of economic stability.
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