Indian Real Estate Market Forecast: 2026

India’s real estate story is heading into 2026 with something that’s rare in global markets right now: strong economic momentum, low inflation and easing interest rates. GDP growth has been upgraded to about 7.3% for FY 2025-26 by the RBI, with inflation forecast around 2%, giving policymakers room to support growth without overheating the economy.

On the ground, 2025 has been a year of controlled cool-down rather than slowdown. Residential sales have dipped from the post-COVID frenzy but remain high by historical standards, with around 96,300 units sold in Q2 2025 across the top 7 cities, only 3% higher than Q1 but still on a strong base.

Premium and luxury housing now drive the market; homes above ₹1 crore account for a majority of sales in many metros.

Put together with record office absorption and steady investor interest, most serious research houses expect 2026 to be a continuation of the upcycle but at a more disciplined, segmented pace, rather than a runaway boom.

1. Macro Backdrop for 2026

India enters 2026 in rare macro sweet spot. GDP is growing faster than almost any major economy, with the IMF projecting growth around 6.6% for 2025/26 and RBI turning more optimistic at 7.3%.

Inflation has fallen sharply, enabling the RBI to cut the repo rate to 5.25% in December 2025, which is already feeding into lower home loan rates.

For real estate, this combination matters more than any “sentiment” story:

• Cheaper mortgages directly improve affordability for end-users.
• Stable economic growth keeps job creation strong in IT, GCCs, manufacturing and services, which underpins both residential and commercial leasing demand.
• Institutional capital continues to flow into Indian office, warehousing and residential development sites, with CBRE projecting positive investment momentum through 2025 and into the medium term.

Barring an external shock, 2026 is set up as a “supportive macro + recalibrate property cycle” rather than a bubble year.

2. Residential Real Estate Forecast 2026

2023-24 saw record housing sales; 2025 has been about digesting that spike. ANAROCK’s Q2 2025 data shows a 20% year-on-year decline in sales volume across top 7 cities, but only a marginal sequential dip, signalling consolidation on a high base rather than a collapse.

JLL’s Q3 2025 update calls this a “pivotal transformation”, with overall sales down 12% YTD versus 2024, but the market shifting towards fewer units, higher ticket sizes and more premium demand.

For 2026, the base case many analysts use is:

• Flat to mid-single-digit growth in volumes (say, 3-7%) off an already elevated base.
• Stronger bounce in cities linked to technology, manufacturing and infra corridors: Gurgaon, Noida, Bengaluru, Chennai, Hyderabad, Pune and select MMR micro-markets.

Lower mortgage rates after the December 2025 cut tilt the balance slightly in favour of a mild volume recovery during the second half of 2026, especially if developers moderate price hikes.

Segment Mix:

Two structural shifts that 2026 is likely to carry forward:

1. Premium and luxury as the demand engine
   JLL and ANAROCK both highlight that homes above ₹1 crore, and especially in the ₹1.5-3 crore band, now contribute the largest share of sales and new launches in top cities. This reflects rising incomes at the upper end, lifestyle upgrades post-COVID, and a preference for branded, amenity-rich projects.
2. Affordable housing under pressure
   Developers are pulling back from sub-₹40 lakh inventory due to rising land and construction costs; ANAROCK notes a visible shift away from affordable launches in markets like Chennai and parts of NCR. Unless there is a fresh policy push, true affordable supply is likely to lag in 2026.

3. Office, Retail and New-Age Assets

Residential gets most of the public attention, but the office market is arguably the bigger “confidence signal” for 2026.

Knight Frank’s 2025 reports flag that India’s office market is on track for a record year in absorption, with diverse occupier demand from IT, GCCs, BFSI and flex-space operators. That is not just a leasing story; it is a jobs story, and jobs are what ultimately pay EMIs.

CBRE’s India Market Outlook 2025 indicates that institutional investment is gravitating toward grade-A offices, logistics parks and data centres, with a healthy pipeline of deals and development sites. Given the growth in ecommerce, manufacturing and India’s push to become a global services hub, most of these trends carry logically into 2026.

Some likely 2026 themes:

• Office: Stable to rising gross absorption in top 6 cities; modest rental growth in prime micro-markets; more GCCs shifting work to India.
• Warehousing & logistics: Continued expansion along key corridors (NCR, Mumbai–Pune, Bengaluru, Hyderabad) on the back of e-commerce and manufacturing.
• REITs and income-yielding assets: As interest rates ease and volatility in equities persists, listed REITs and institutional-grade rental assets could become more attractive to yield-seeking investors.

4. Tier-2 Cities and New Corridors

While the “top 7” metros still dominate data, several Tier-2 and Tier-3 cities are slowly moving from speculative to institutional attention. Many long-range outlooks to 2030 project India’s real estate market to grow from about US$584 billion in 2024 to US$845 billion by 2030, 7.3% CAGR, with a rising GDP share. That growth cannot be absorbed by metros alone.

In 2026, watch for:

• Airport- and expressway-linked corridors (Noida - Jewar belt, Navi Mumbai - Navi Mumbai Airport zone, peripheral Bengaluru, Hyderabad’s western corridor).
• State capitals and industrial hubs like Ahmedabad, Lucknow, Coimbatore, Jaipur and Indore where infra spending and manufacturing investments are rising.

These markets may not deliver metro-like liquidity immediately, but they offer lower ticket sizes, improving job bases and better yield-to-price balance, which is attractive for long-term investors.

5. What could go wrong? Key risks to the 2026 outlook

A realistic 2026 forecast has to acknowledge what can de-rail the story:

• Affordability fatigue: After two-three years of strong price growth, even with lower interest rates, some segments may hit affordability ceilings, especially in MMR.
• Policy or regulatory surprises: Changes in taxation, stamp duties, or rental/land policies could temporarily disturb sentiment.

The good news: most current data suggests developers and lenders are more disciplined than in the 2010-2013 cycle, with more measured launches and better underwriting.

6. What this means for homebuyers and investors in 2026

For genuine end-users, 2026 looks more like an opportunity to buy in a rationalising upcycle, rather than chase a runaway market. Softer mortgage rates, more selective launches, and a wider choice of premium inventory tilt the balance slightly toward buyers, though not enough to expect steep discounts in good projects.

For investors, the next year is less about blind price appreciation and more about careful market selection and asset quality:

• Focus on employment-linked corridors, not just “cheap land”.
• Prefer reputed developers with strong balance sheets and delivery track records.
• Be realistic: factor 4-8% annual price growth and stable to improving rentals, rather than doubling expectations in three years.
• Consider part of your allocation in fractional real estate, high-quality rental assets or structured vehicles if you want real estate exposure without operational headaches.