ICRA Expects Housing Sales Volume To Rise By 1-4% In FY26 Across Seven Major Cities

Housing sales volume may rise by a modest 1-4% in the financial year 2025–26, according to ICRA, even as fresh supply is set to increase by 6-9% across India’s seven major cities.

The seven cities that the rating agency covered in the report were Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, National Capital Region, and Pune.

Presenting its projections and outlook for the residential real estate sector in the top seven major cities in India, the rating agency’s statement said that the average selling prices might appreciate by 3-5% in the ongoing fiscal.

ICRA estimates that new project launches in the top seven cities will total around 620-640 million square feet. As a result, new supply will grow by 6-9% in the 2025-26 fiscal.

In contrast, it noted that "the launches are estimated to have sharply declined by 14-17% in 2024-25 due to approval-related challenges".

This was after the FY24 had witnessed the launches totaling 701 million square feet, ICRA said, pointing to its research as well as PropEquity data.

Anupama Reddy, vice president and co-group head of corporate ratings at ICRA, pointed out that the area sold might have declined 4–7% in the 2024-25 fiscal to 650-670 million square feet due to lower launches.

However, she added, “ICRA expects the area sold in the top seven cities in India to grow by 1-4% in FY26.”

The rating agency has maintained a stable outlook on the residential real estate sector.

“Given the consolidation in favour of larger and established players in the sector, the performance of these players is anticipated to outperform the broader underlying industry trends,” it added.

The average selling prices in the top seven cities witnessed a surge of 11% each in FY23 and FY24.

ICRA estimates that prices might have risen by 13-15% in FY25, due to the increasing share of luxury segment sales along with pricing flexibility for developers, driven by comfortable years-to-sell.

"ICRA expects the average selling prices to increase by 3-5% in FY26," the statement added.

—With PTI inputs