NEW DELHI: The residential real estate market in India is projected to maintain steady growth over the next two fiscal years, with a sales value increase of 10-12% annually. This growth is attributed to the rising demand for premium and luxury homes, as noted in a recent report by Crisil Ratings.
Sales volumes are estimated to rise by 5-7%, with average prices expected to appreciate moderately by 4-6%. This reflects sustained end-user demand, enhanced affordability due to lower interest rates, and a smoother rollout of projects in key urban regions. This follows a post-pandemic growth period where the sector achieved a compound annual growth rate (CAGR) of 26% in value.
The demand for premium homes continues to rise, with launches in this segment increasing from 9% in 2020 to 37% in 2024, and projected to reach 38-40% of total new launches in 2025 and 2026. Conversely, launches in the affordable and mid-segment housing categories are expected to decline significantly due to escalating land and construction costs, which make these options less attractive to developers.
“Urbanization and increasing incomes are fueling the demand for larger, more luxurious homes. The ongoing trend of premiumization is likely to contribute to steady price growth in the medium term,” stated Gautam Shahi, director at Crisil.
While overall supply is expected to exceed demand—leading to a slight rise in inventory levels to 2.9-3.1 years—Crisil anticipates that developer credit profiles will remain strong, supported by healthy collections and reduced debt levels. Asset-light strategies such as joint ventures and collaborative developments have further strengthened balance sheets.
“Developers’ ability to maintain disciplined leverage and manage inventory will be crucial for sustaining momentum in the upcoming years,” added Pranav Shandil, associate director at the firm.
