India's residential real estate market is expected to remain resilient through the second half of 2026 despite moderating sales growth, with strong demand for premium housing, urbanisation and infrastructure-led development expected to support the sector as it enters a phase of consolidation, according to Knight Frank India. According to Shishir Baijal, International Partner, Chairman and Managing Director at Knight Frank India, the housing market continues to reflect the stability of its strong fundamentals, with H1 2026 delivering one of the strongest half-year sales performances of the past decade. While growth has reduced following a steep recovery from pandemic lows, the market's underlying fundamentals remain firmly intact. The report emphasizes that the market is entering H2 2026 in a phase of consolidation rather than correction, with ongoing urbanisation, stable employment, lower home loan rates following cumulative monetary easing, and stronger developer balance sheets expected to continue supporting housing demand.
The market outlook follows a strong first half of 2026, when residential sales across eight major cities stood at 171,471 units, while developers launched 187,350 units. As reported by Knight Frank, homes priced above ₹1 crore accounted for 54 per cent of total sales, up from 49 per cent a year earlier, reflecting a continued shift towards premium housing. This trend towards higher-value properties indicates changing buyer preferences and the market's evolution towards more affluent segments, with the consultancy noting that stable economic fundamentals, infrastructure investment and evolving buyer preferences continue to support the sector, although the market is becoming more selective as affordable housing supply remains constrained and buyers increasingly prioritise quality, location and long-term value. The report also highlights that Mumbai's premium homes priced between ₹2 crore and ₹5 crore accounted for 60% of launches and 43% of sales, while Bengaluru's premium homes between ₹1 crore and ₹2 crore emerged as the city's most popular category, with properties priced between ₹2 crore and ₹5 crore recording the fastest growth.
According to Knight Frank's latest India Real Estate report, Mumbai Metropolitan Region recorded 47,355 home sales during H1 2026, making it India's largest residential market once again with sales remaining broadly unchanged from last year despite developers stepping up launches by 8% to 49,161 units. Interestingly, unsold inventory actually fell 4% year-on-year, suggesting that fresh launches are continuing to find buyers despite higher prices. Bengaluru emerged as the fastest-growing market with 5% increase to 27,968 units, driven by its expanding technology sector and Global Capability Centre ecosystem. However, Delhi-NCR faced a 7% decline to 24,862 units, extending the slowdown that began in 2025, with the market traditionally being more sensitive to changes in buyer sentiment and recent geopolitical uncertainty affecting confidence. The report notes that Navi Mumbai is steadily increasing its importance with its share of residential launches rising from 18% in 2014 to 21% in H1 2026, while North Bengaluru has emerged as the fastest-growing corridor with launches rising 10% and sales increasing 11%.
Despite the positive outlook, Knight Frank cautioned that sales have plateaued, new launches are outpacing absorption, unsold inventory is gradually rising and price growth is becoming increasingly concentrated in premium and luxury housing. However, the report expects ongoing urbanisation, stable employment, lower home loan rates following cumulative monetary easing, and stronger developer balance sheets to continue supporting housing demand. The consultancy noted that RERA-led reforms, better capital discipline and the growing presence of well-capitalised developers are expected to keep the market stable, making a sharp correction unlikely. According to the Knight Frank report, developers may increasingly rely on demand-side incentives such as flexible payment plans, subvention schemes and stamp duty waivers if launches continue to exceed sales during the remainder of the year. The report also highlights that inventory below ₹1 crore has steadily disappeared from premium locations across Gurugram, Noida and Delhi, with much of the available supply now concentrated in projects priced above ₹2 crore, effectively pushing many end-users out of the market.
