India's Housing Market Sees Strong H1 2026, Premium Segment Dominates

Synopsis

India's residential property market delivered one of its strongest first-half performances in over a decade, with home sales staying near record highs even as growth stabilised. Knight Frank India says premium housing is now driving the market, while affordable homes continue to shrink. Mumbai led sales, Bengaluru posted the fastest growth and NCR remained the weakest market.

India's housing market is selling homes at near-record levels, but the dream of buying an affordable home is quietly moving out of reach for many buyers. As prices keep climbing and developers focus on premium projects, affordable homes are shrinking from the market even as overall sales remain remarkably strong.

For years, the biggest question surrounding India's property market was whether the post-pandemic boom could last. Knight Frank's latest report suggests it can. But beneath those reassuring numbers, another question is quietly becoming even more important: Who is still finding homes within their budget?

"India's 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," Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said.

Who can still afford to be part of India's realty boom?

India's housing boom is increasingly being driven by buyers who can spend more. Overall sales remain close to record highs, but a growing share of those purchases now comes from the premium end of the market as affordable homes become harder to find.

Knight Frank India's Gulam Zia, International Partner and Senior Executive Director, Research, Advisory, Infrastructure and Valuation, believes the growing share of premium housing reflects not only rising affluence among wealthier buyers but also the gradual disappearance of affordable homes as years of price increases have pushed them beyond the reach of many households.

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He said inventory is rising, sales are no longer growing as rapidly and future price growth may increasingly depend on buyer incentives rather than underlying demand. These are not signs of stress, he said, but they are developments worth watching as India's housing cycle matures.

"Homebuyers today are more discerning, prioritising product quality, infrastructure, developer credibility and long-term value over short-term price considerations. This is reflected in the growing share of premium housing, which now contributes more than half of all residential sales. At the same time, disciplined project launches and healthy inventory levels demonstrate that developers are responding prudently to evolving market demand, creating the foundation for sustainable long-term growth," Gulam Zia said.

India's housing market: What numbers show

According to Knight Frank India's India Real Estate: Residential and Office (January-June 2026) report, the country's residential market delivered one of its strongest first halves in more than a decade. Developers sold 171,471 homes across the eight major cities during the first six months of 2026, slightly higher than the 170,201 units sold in the same period last year. New launches also continued to rise, with developers introducing 187,350 homes into the market, a 4% increase from a year earlier.

At first glance, the market appears remarkably stable. After four years of recovering from the pandemic slowdown, India's housing sector is no longer racing ahead. Instead, it seems to have found a comfortable cruising speed.

Unlike previous property cycles marked by sharp swings, today's market looks far more measured.

Knight Frank India says stable economic conditions, infrastructure-led urban development and steady employment have continued to support genuine homebuyers across major cities. Developers, meanwhile, have largely matched new launches with prevailing demand, helping demand and inventory remain broadly balanced despite rising prices and changing buyer preferences.

Sales remain close to the highest levels seen in the past decade. Yet instead of explosive growth, the market has entered what the consultancy describes as a phase of stabilisation. Rather than signalling weakness, this slower pace increasingly reflects a housing market that is becoming more mature after several years of rapid expansion.

Whether this plateau can be sustained through the rest of 2026 will now become the key question.

Another indicator suggests the market remains fundamentally healthy. Inventory has continued to rise gradually, but not at an alarming pace. The Quarters-to-Sell (QTS) ratio stood at around six quarters, meaning developers would require roughly a year and a half to sell existing stock at current demand levels.

The biggest change isn't how many homes are selling

Here's where India's property story takes an unexpected turn. If you think affordable housing is still leading the market, think again.

Homes priced above ₹1 crore now account for 54% of all residential sales, up from 49% a year ago.

Part of this reflects rising income and growing demand from wealthier households looking for larger homes, integrated townships and premium amenities. But Knight Frank says there is another reason.

Years of sustained price appreciation have pushed many mid-market homes into higher price brackets. At the same time, developers have launched relatively few affordable projects, leaving buyers with fewer lower-priced choices.

The result is a housing market that remains busy, but one where the buyer base is gradually becoming narrower.

The shift is also becoming visible in what builders are bringing to the market. Premium projects increasingly dominate both launches and sales, while affordable additions remain limited.

Builders are launching more homes than buyers are purchasing

Developers introduced 187,350 new homes during the first half of 2026, making it one of the busiest launch periods in the past decade.

That was also the latest chapter in a trend that has continued since 2022 - launches have consistently exceeded sales.

During H1 2026 alone, developers launched around 15,879 more homes than were sold.

Even so, Knight Frank does not see this as a warning sign just yet.

Instead, the report suggests developers are responding carefully to evolving demand while benefiting from stronger balance sheets, better project execution and rising buyer confidence.

Premium housing continues to dominate new launches, while affordable additions remain limited.

One city stumbled while another quietly surged ahead

The country's biggest residential markets continued to move at different speeds.

Mumbai retained its crown as India's largest housing market by sales volume, supported by steady demand across both premium and mid-income housing.

Bengaluru emerged as the standout performer, recording the strongest year-on-year sales growth among the major cities. Knight Frank attributes this to the city's healthy employment generation, expanding Global Capability Centre ecosystem and robust technology industry, which continue to support demand across multiple price segments.

Pune also maintained solid momentum thanks to its diversified economy and improving infrastructure.

Hyderabad and Chennai recorded stable housing activity, supported by demand from owner-occupiers as well as long-term investors.

However, the National Capital Region stood apart for less encouraging reasons.

Sales there declined 7% year-on-year to 24,862 units, extending the 9% decline recorded during 2025. Knight Frank says geopolitical uncertainty has weighed on sentiment, while affordable inventory in premium locations across Gurugram, Noida and Delhi has gradually disappeared. Much of the available stock is now concentrated in projects priced above ₹2 crore, putting many end-users out of the market.

Luxury homes are stealing the spotlight

Homes priced below ₹50 lakh accounted for just 19% of total sales, with 32,063 units sold. That segment declined 15% from 37,796 homes a year earlier. Mumbai alone contributed 17,418 of those sales, representing 54% of the category.

The ₹50 lakh-₹1 crore segment remained the second-largest category with 46,490 homes sold, accounting for 27% of overall sales despite a 5% decline. Mumbai again led with 11,570 units.

The most popular category was homes priced between ₹1 crore and ₹2 crore. Sales reached 50,488 units, making up 29% of total residential transactions.

Homes priced between ₹20 crore and ₹50 crore recorded the fastest growth of any category. Sales more than doubled by 105%, rising from 181 homes in H1 2025 to 371 this year. Mumbai accounted for 214 of those transactions, or 57%.

The ultra-luxury segment above ₹50 crore recorded 35 sales nationwide, with Mumbai contributing 23 homes, or 66%, while the remaining transactions came from NCR.

Residential prices continued rising across every tracked market, although increases were less aggressive than during 2023 and 2024. Mumbai remained India's most expensive city at ₹36,881 per sq ft, followed by Delhi at ₹26,027 and Gurugram at ₹18,354.

Delhi and Faridabad recorded the fastest annual price growth at 18%, followed by Bengaluru at 9%, Noida at 8%, Hyderabad at 7%, Gurugram and Greater Noida at 6%, Mumbai, Pune, Chennai and Kolkata at 5%, Thane at 4%, and Navi Mumbai and Ahmedabad at 3%.

Looking ahead, Knight Frank believes the market is entering the second half of 2026 in consolidation rather than correction. Urbanisation, stable employment, cumulative monetary easing of 125 basis points leading to lower home loan rates, healthier developer finances and regulatory reforms continue to support the sector.

Yet fresh challenges are emerging. Sales have plateaued, launches continue to outpace absorption, inventory is gradually rising, while geopolitical tensions in West Asia, elevated energy prices, the pause in the interest-rate cutting cycle and concerns around AI-driven disruption to white-collar jobs could influence buyer confidence.

If launches continue to exceed sales, developers may increasingly rely on incentives such as flexible payment plans, subvention schemes and stamp duty waivers.