India's Residential Property Market Faces Slowdown Amid Global Uncertainty

The Indian residential property market has encountered a slowdown in the April-June quarter of 2026, with home sales declining across major cities. Factors such as global conflicts and cautious buyer sentiment have contributed to this trend. While some cities like Kolkata and Hyderabad saw growth, others like Pune faced significant declines. Despite the challenges, developers continue to launch new projects, leading to an increase in unsold inventory. Experts believe that while the market is currently soft, underlying demand remains, and future sales will depend on geopolitical stability and economic growth.

By Narendra Chaudhary Jun 29, 2026, 17:36 IST

Market Overview

During the April to June quarter of 2026, India's residential real estate sector experienced a downturn, with home sales in the seven major cities declining. Despite developers continuing to introduce new projects, the latest report from a real estate consultancy indicates that factors such as the ongoing conflict in West Asia, supply chain disruptions, and a cautious approach from buyers have negatively impacted housing demand.

In the second quarter of 2026, residential sales in the top seven Tier-I cities totaled 90,715 units, reflecting a 6% decrease from the 96,285 units sold in the same quarter the previous year. This also marks an 11% drop from the 101,675 units sold in the first quarter of 2026, highlighting a significant slowdown in market activity.

City Performance

Among the major residential markets in India, only Kolkata, Hyderabad, and Bengaluru reported growth in housing sales year-on-year. Kolkata led with a 10% increase, followed by Hyderabad at 2%, and Bengaluru with a 1% rise compared to the same period last year. Conversely, Pune saw the most significant decline, with sales plummeting 15% from 15,410 units in Q2 2025 to 13,090 units in Q2 2026. Chennai also faced a notable decrease, with a 9% drop in residential sales.

Additionally, two of the largest property markets, the National Capital Region (NCR) and the Mumbai Metropolitan Region (MMR), reported declines of 6% and 8%, respectively, in unit absorption compared to the previous year.

New Project Launches

Despite the decline in demand, developers have remained proactive in launching new residential projects. The supply of new housing increased by 7% year-on-year, rising from approximately 98,625 units in Q2 2025 to nearly 106,000 units in Q2 2026. The report noted that MMR and Bengaluru accounted for 53% of the total new inventory across the top seven cities.

However, with project launches outpacing home sales, unsold inventory surged, exceeding 616,000 units by the end of Q2 2026, compared to around 562,000 units a year earlier, marking a 10% annual increase. On a quarter-to-quarter basis, fresh project launches saw a 16% decline, indicating that developers are adjusting to the evolving market landscape.

Shifting Buyer Sentiment

Anuj Puri, chairman of the consultancy, commented on the current market dynamics, stating that the housing sector is gradually achieving a healthier equilibrium between supply and demand after years of robust sales growth. He noted that while new launches remained strong on an annual basis, the moderation in project launches quarter-on-quarter can be attributed to weakened buyer sentiment due to global uncertainties.

Puri emphasized that premium housing and infrastructure-driven micro-markets continue to outperform the overall market. He pointed out that disruptions from the Middle East conflict and uncertainties related to artificial intelligence in the IT sector have led many potential buyers to hesitate. Despite the current slowdown, experts believe that the underlying demand for housing remains strong, with future sales likely hinging on improved geopolitical stability, steady interest rates, and ongoing economic growth, which could entice homebuyers back into the market in the upcoming quarters.