India’s residential real estate market recorded a 6% YoY rise in average housing prices in the first quarter of FY27, with New Delhi, Noida, Chennai, Greater Noida and Bengaluru emerging as key contributors to the growth, according to a research report by Kotak Institutional Equities.
Pricing Outpaces Volume Growth
Average realisation across key markets increased to Rs 9,629 per sq ft in Q1 FY27, up 6% YoY, although it declined 2% sequentially. The increase in realisations helped offset relatively softer sales volumes, with overall sales value rising 9% YoY.
Kotak noted that several projects in Bengaluru and Gurgaon have recorded higher price CAGR over the past few years, contributing to the rise in overall realisations across major micro-markets.
Sales Volumes Remain Range-Bound
Residential sales across India stood at 247 million sq ft during Q1 FY27, registering a 3% YoY increase but declining 3% sequentially. Meanwhile, new project launches fell sharply to 242 million sq ft, down 14% YoY and 16% QoQ.
According to the report, industry growth over the past two years has been driven predominantly by price appreciation. A sustained recovery in sales volumes, therefore, would provide a stronger indication of underlying demand strength.
NCR Sees Sharpest Volume Decline
NCR emerged as one of the weaker markets in terms of sales volumes. Residential sales in the region declined 27% YoY and 8% sequentially to 23.5 million sq ft, while new launches stood at 21.2 million sq ft.
In comparison, MMR recorded sales of 41.5 million sq ft, supported by 33.8 million sq ft of launches. Bengaluru reported sales of 30.7 million sq ft, while Hyderabad recorded 34.3 million sq ft of sales, supported by 55.5 million sq ft of new launches.
Unsold Inventory Edges Up
Unsold inventory increased sequentially across Bengaluru, Hyderabad and NCR, partly due to fresh project launches. At the all-India level, unsold residential stock stood at .8 billion sq ft as of June 2026, equivalent to around 1.9 years of trailing 12-month sales.
The report also noted that residential industry volumes have remained range-bound for three consecutive years, even as larger developers continue to gain market share through geographical diversification.
Developer Perspective
Manik Malik, President & CEO, BPTP Limited says, "The sustained appreciation in residential prices across key markets reflects a structural shift rather than a cyclical upswing. Homebuyers today are prioritising locations backed by strong infrastructure, connectivity and social ecosystem, resulting in long-term value creation. At the same time, improving rental yields indicate a healthy balance between end-user demand and investor confidence. Markets such as Gurugram, Noida and Faridabad are benefiting from this trend, driven by continued infrastructure investments, quality developments and evolving buyer aspirations. We believe this momentum is supported by strong market fundamentals and will continue to favour well-planned micro-markets with long-term growth potential."
Rishabh Periwal, Sr Vice President, Pioneer Urban Land and Infrastructure Ltd. says, “While national figures showcase a steady upward trend in different cities across the country, our focus is on Gurugram real estate, which is growing rapidly. What we are witnessing isn’t just price appreciation. It's a complete development across both residential and commercial sectors. On the residential front, premium and luxury developments are driving the market. Buyers prioritise connected, amenity rich spaces from trusted brands. Gurugram’s commercial real estate remains a powerhouse, fueled by robust demand for Grade A office spaces and premium retail hubs. For anyone seeking long term valuation, be it buyer or developer, Delhi NCR is no longer just participating in the real estate rally, but actively leading it.
Pushpender Singh, Managing Director, JMS Group says, "The sustained appreciation in residential property values across markets like Gurugram and Noida reflects a structural shift rather than a cyclical upswing. The 117% price growth in Gurugram since 2019 lines up exactly with what we have tracked across our own project cycles, particularly along corridors like Sector 95 and the Dwarka Expressway, where infrastructure delivery has directly fed into capital values. What makes this data meaningful is that rental yields moved up 80 bps in the same period, so buyers are not sacrificing rental returns to chase appreciation. For a developer building in these micro-markets, that is validation that Gurugram's growth story has real depth behind it."
The Report highlights a residential market where price appreciation remains healthy, but volume growth continues to warrant closed monitoring. While established markets continue to support higher realisations, the moderation in sales and launches suggests that developers are likely to remain selective about new supply and increasingly focused on markets and projects with visible end-user demand.
