Residential real estate price growth likely to moderate further in 2026

End users should look beyond prime locations to emerging corridors and peripheral micro-markets that offer better pricing without compromising long-term liveability

As 2025 comes to a close, India’s residential housing market is showing signs of transition after several years of strong post-pandemic price growth. While demand and infrastructure-led development have kept prices elevated across major cities — especially in the premium segment — affordability pressures are beginning to influence buyer behaviour. With price momentum expected to moderate in 2026, it becomes important to assess what lies ahead for homebuyers and investors in a market that remains fundamentally strong but increasingly selective.

 

Tracking home price momentum in 2025

 

While full-year data will be available by December-end, current trends suggest that residential price growth, which was in double digits over the past few years, is moderating to single-digit levels in 2025 — around 8–9 per cent across the top seven cities.

 

According to Anarock Research, average prices in these cities surged 21 per cent in 2024 compared with 2023 — from Rs 7,080 per sq ft at 2023-end to Rs 8,590 per sq ft at 2024-end — but this pace is expected to ease as prices have already risen sharply. While Delhi-NCR and Bengaluru may still record double-digit growth in 2025 due to higher premium and luxury supply, most other cities are likely to see only single-digit increases.

 

Which segment saw faster price growth?

 

Anarock Research shows that luxury housing (priced above Rs 1.5 crore) recorded the fastest price growth, with average prices across the top seven cities rising 40 per cent over the past three years — from about Rs 14,530 per sq ft in 2022 to Rs 20,300 per sq ft in 2025.

 

“Delhi-NCR led this surge with a 72 per cent jump, followed by MMR (43 per cent) and Bengaluru (42 per cent). In contrast, affordable housing lagged with a modest 26 per cent increase, while mid-range and premium homes (Rs 40 lakh–Rs 1.5 crore) saw prices rise 39 per cent during the same period,” says Anuj Puri, chairman, Anarock Group.

 

Sam Chopra, president and country head, eXp Realty India, also points out that in 2025, premium and luxury housing led price gains across major cities, supported by financially strong end-users seeking larger homes, superior amenities and branded developments. “The mid-range segment continues to drive volumes, particularly in infrastructure-led corridors, but remains more sensitive to affordability, interest rates and supply, while premium pricing is shaped largely by location, brand and differentiation,” he says.

 

Will prices keep rising in 2026?

 

Industry experts say a sharp escalation in average residential prices appears unlikely, as homes have already become unaffordable for many buyers after steep increases in recent years.

 

“Developers are expected to remain cautious on pricing, especially as sales volumes have begun to taper off. Any significant price hike could further dent demand and prove counterproductive. That said, steady price growth may continue in select locations and projects where demand remains strong,” says Puri.

 

Factors that could temper price growth

 

Global headwinds such as geopolitical tensions, elevated housing prices in top cities and job uncertainty — especially following AI-led disruptions and layoffs in IT/ITeS — have dampened housing demand in 2025, a trend likely to persist into 2026.

 

“After a sharp price run-up over the past three years, growth has moderated to single digits, and with tariffs still unresolved, buyer caution is expected to continue, limiting developers’ ability to raise prices,” says Puri.

 

“In some corridors, new launches exceeding demand can stall price growth without triggering corrections, while rising construction and land costs risk pushing prices beyond near-term affordability, slowing sales momentum,” says Chopra. He adds that monitoring inventory health at a micro-market level — such as months-to-sell — remains critical, as city-level averages can mask sharp local divergences.

 

Navigating elevated home prices

 

According to industry experts, housing prices, which have climbed sharply since the Covid period, are unlikely to see a meaningful correction. Demand across major cities remains structurally strong, while elevated construction costs limit the scope for broad-based price declines.

 

“The pace of price increases and heavy supply additions has made some buyers more cautious, leading to delayed decisions in select micro-markets. In this environment, buyers need clarity on priorities. Being flexible on parameters such as unit size, amenities, or micro-location can materially improve affordability. A data-led, measured approach will serve buyers better than waiting for a correction that is unlikely to materialise,” says Saurabh Garg, co-founder and chief business officer, NoBroker.

 

Ajay Malik, chief strategy officer, RISE Infraventures, says: “Buyers should also widen their search to emerging corridors and peripheral micro-markets that offer better pricing without compromising long-term liveability. Staggered payment plans, ready-to-move-in homes and projects nearing completion can help reduce both financial and execution risks in a high-price environment.”

 

Key precautions for homebuyers

 

In the current market, thorough due diligence is critical for end-users. This should start with the locality, not just the project, assessing everyday liveability factors such as traffic, water availability, connectivity and access to schools, healthcare and daily conveniences, all of which influence long-term comfort and resale value.

 

“For under-construction or newly launched projects, buyers must evaluate the developer’s track record, delivery history and construction quality. Verifying Real Estate (Regulation and Development) Act (Rera) registration, project approvals, and a clear Khata (title) is essential,” says Garg.

 

Malik adds, “Affordability has become more critical than ever. Buyers must realistically assess whether their EMIs will remain comfortable even in a scenario of fluctuating interest rates. It is equally important to factor in everyday living expenses, long-term maintenance costs and overall ownership expenses.”

 

Should investors enter now?

 

Indian real estate remains a compelling asset class heading into 2026, offering stability and long-term growth. “Unlike equities, which are exposed to global volatility, real estate is supported by strong domestic fundamentals such as urbanisation, job creation, rising incomes and sustained demand across housing, offices and warehousing. It also serves as a natural inflation hedge, with rents and asset values adjusting over time,” says Puri.

 

While gold continues to provide safety after its strong 2025 rally, well-chosen real estate investments held with a long-term view remain attractive. Improved regulation and rising institutional participation further strengthen the sector’s investment appeal.

 

“The key is aligning investment decisions with time horizon—whether that is capitalising on gains today or patiently building wealth over the years ahead,” says Garg.

 

(The writer is a Delhi-based independent journalist)  Strong run-up over past three years 

Average prices of homes priced between Rs 40 lakh and Rs 1.5 crore (in Rs/sq. ft)
City	2022	2025 (YTD)	Change (%)
NCR	6341	9750	54%
Kolkata	5532	6750	22%
MMR	11481	16400	43%
Pune	7311	8850	21%
Hyderabad	5665	8420	49%
Chennai	6233	7450	20%
Bangalore	5650	9140	62%
PAN INDIA	6880	9537	39%

(Source: ANAROCK Research & Advisory)