Home Sales Cool, But India’s Property Prices Keep Rising

India’s residential real estate market is showing an interesting shift in 2026: home sales are slowing, but property prices continue to rise.

According to the latest Real Insight Residential Q2 2026 report by PropTiger, 91,729 homes were sold across India’s top eight residential markets during the second quarter of 2026. That represents a 6.1% decline compared with the same period last year and a 4.4% drop from the previous quarter.

At the same time, the average sales-weighted residential property price increased 1% quarter-on-quarter to ₹10,153 per sq ft, keeping the national average above the ₹10,000-per-sq-ft mark for the second consecutive quarter.

The numbers point towards a market that is not necessarily weakening, but one where buyers are becoming more selective while developers continue to maintain pricing power.

Home Sales Slow Despite Rising Property Prices

The Q2 2026 numbers reveal a widening gap between sales volumes and property prices.

Developers launched around 89,161 new housing units across the top eight cities during the quarter, compared with 91,729 homes sold. While sales declined, new launches were down 4.2% sequentially but remained 6% higher than a year earlier.

The fact that sales continue to exceed fresh supply is important. It indicates that the market has not yet entered a phase of significant inventory accumulation.

However, the decline in sales suggests that buyers are becoming increasingly cautious, particularly as property prices and overall homeownership costs rise.

For middle-income homebuyers, the question is becoming increasingly straightforward: How much more can property prices rise before affordability starts affecting demand?

Bengaluru Leads India’s Property Price Growth

Bengaluru has emerged as one of the clearest examples of the changing affordability equation.

Residential prices in Bengaluru jumped 26% year-on-year to ₹9,931 per sq ft, the highest annual price increase among the eight major markets tracked in the report.

Interestingly, sales in the city declined 9.2% YoY during the same period.

This combination of rising prices and falling sales could indicate that buyers are becoming more price-sensitive.

Pune also crossed an important threshold, with average residential prices reaching ₹8,084 per sq ft, representing a 13.7% annual increase.

These markets highlight a broader trend across India’s urban housing sector: premiumisation continues, but affordability is becoming a more important consideration.

Mumbai MMR Remains India’s Biggest Housing Market

For Mumbai’s real estate market, the numbers remain particularly significant.

The Mumbai Metropolitan Region (MMR) continued to be India’s largest residential market by both sales volume and value.

The region recorded 24,112 home sales during Q2 2026, with the average property price reaching ₹15,422 per sq ft. Prices increased 20.4% year-on-year, while sales declined around 7% compared with the previous year.

Mumbai’s performance reinforces the city’s position as one of India’s most valuable residential markets.

Limited land availability, redevelopment activity, infrastructure investment, premium housing demand and strong interest in established locations continue to support property values across the MMR.

However, the combination of high prices and softer sales also suggests that buyers in Mumbai are becoming more selective about location, apartment size, amenities and overall value.

Not Every City Is Seeing Sales Decline

Despite the national slowdown, housing demand remains strong in several markets.

Chennai recorded the strongest annual growth in sales, with volumes increasing 36% YoY to 7,183 units.

Hyderabad also performed strongly, with 13,196 homes sold during the quarter, representing 14.6% annual growth.

Kolkata recorded a particularly strong sequential recovery, with sales increasing 22% compared with the previous quarter.

On the other hand, Pune and Ahmedabad recorded annual sales declines of 20.8% and 20.2%, respectively.

This uneven performance shows that India’s residential market cannot be viewed as a single market. Local employment conditions, infrastructure, affordability, supply, investor sentiment and buyer demographics are increasingly influencing individual city markets.

Premium Homes Continue to Drive the Market

One of the biggest trends emerging from the latest data is premiumisation.

Despite weaker overall sales volumes, higher-priced homes continue to find buyers in major Indian cities.

This suggests that demand has not disappeared. Instead, the composition of demand may be changing.

Higher-income buyers continue to have purchasing power, while middle-income buyers are becoming more cautious about taking on large home loans at elevated property prices.

For developers, this creates an incentive to focus on projects with stronger locations, better amenities and higher ticket sizes.

For buyers, however, rising prices mean that the same budget may now purchase a smaller home or require moving further away from established locations.

Why Are Property Prices Still Rising?

A key question is why prices are increasing even though sales have moderated.

One explanation is the relatively balanced demand-supply situation.

With 91,729 homes sold against 89,161 new launches, developers have not flooded the market with excess inventory. This supply discipline can help support pricing even when sales volumes moderate.

Construction costs, land prices, redevelopment expenses and infrastructure-led appreciation are also important factors influencing residential prices.

In several major cities, improved connectivity and infrastructure are increasing the attractiveness of emerging micro-markets, allowing developers to command higher prices.

Is India’s Housing Market Becoming Too Expensive?

The latest numbers do not suggest an immediate housing-market crisis.

Inventory has not risen sharply, sales remain substantial and developers continue to maintain supply discipline.

But affordability is becoming the biggest issue to watch.

Bengaluru provides a clear example. Prices rose 26% in one year even as sales declined 9.2%. Pune has crossed ₹8,000 per sq ft, while MMR’s average price is already above ₹15,000 per sq ft.

If prices continue rising faster than household incomes, more buyers could postpone purchases, reduce their budgets or shift towards smaller homes and peripheral locations.

That could eventually force developers to balance their desire for price appreciation with the need to maintain sales momentum.

What Could Happen During the Festive Season?

The upcoming festive quarter could provide an important test for India’s housing market.

Festive-season demand traditionally supports property purchases, while infrastructure development and improving connectivity could continue to support several major urban markets.

If home sales recover while prices remain elevated, it would strengthen the argument that India’s housing market is entering a more mature phase rather than experiencing a fundamental slowdown.

But if sales remain weak while prices continue climbing, affordability could become a much bigger concern for developers and homebuyers.

India’s residential real estate market is entering an interesting phase.

Home sales are cooling, but property prices are still climbing.

The latest Q2 2026 data suggests that India’s housing market is not facing a major demand-supply imbalance yet. Instead, buyers appear to be becoming more selective as prices rise.

For developers, the challenge will be maintaining sales momentum without pushing prices beyond what buyers can comfortably afford.

For homebuyers, the message is equally important: location, pricing, financing costs and long-term value matter more than ever.

The next few quarters will reveal whether India’s property market can continue its premiumisation trend or whether affordability eventually puts a stronger brake on demand.

For now, the market appears to be maturing rather than collapsing—but rising prices are making affordability the biggest question in Indian real estate.