Real(i)ty Check: Housing Market Losing Steam

The residential real estate sector which displayed remarkable resilience in the post-pandemic rebound, is now facing multiple headwinds including a slowing economy and rising inflation in the wake of West Asia conflict. Particularly, the growing mismatch between high property prices coupled with elevated home loan rates and household income is creating a demand-side drag, leading to housing slowdown.
Vinod Behl

The residential real estate market had started losing steam in the last quarter of 2025 and the West Asia war has further precipitated the matter. The slowdown has stretched to the first quarter of 2026 and beyond. After a multi-year boom, housing sales were seen falling up to 13% YoY in January-March 2026 quarter which saw the lowest sales volumes (below 1 lakh), due to severe shortage of affordable housing supply and geopolitical uncertainty and supply chain disruption.

According to PropEquity, housing sales went down by 13% YoY and 6% QoQ to 98761 units in 9 major cities. Amid falling sales, developers had 19% lower launches. As per Anarock Research, housing sales in top 7 cities dropped by 7% sequentially. MMR and Pune experienced a significant sales drop, though the Southern markets saw positive momentum. According to PropTiger, sales across 8 major cities fell 2% YoY to 95973 units with flat supply of new homes. The drop in new launches further brought down housing sales.

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