Housing Completions to Drive Demand for Late-Stage Building Materials
India's housing sector is set to experience a surge in demand for building materials such as tiles, bathware, paints, wood panels, and adhesives over FY27-FY29, driven by a strong pipeline of housing completions, according to a report by Equirus Securities. The report notes that homes launched between 2022 and 2025 are expected to be delivered during this period, despite near-term challenges like inflationary pressures and water supply restrictions that could affect construction timelines.
Market Rebalancing and Supply Trends
India's housing market entered a rebalancing phase in the first quarter of 2026, with demand declining for the second consecutive quarter by 2.2% quarter-on-quarter, even as prices increased 14.1% year-on-year. At the same time, supply rose 6.8% quarter-on-quarter and 10.1% year-on-year, with strong activity in cities such as Gurugram, Bengaluru, Hyderabad, and Greater Noida, the report stated. End-user demand remained the primary driver, with two- and three-bedroom units accounting for nearly 80% of total demand, reflecting buyers' preference for practical housing formats.
Record Housing Completions Expected in 2026
The report highlighted that the national new housing supply index reached 140.5 in the first quarter of calendar year 2026. Around 5.4 lakh housing units are scheduled for completion across India's top seven cities in 2026, the highest in a decade, reflecting strong demand for late-stage building materials following the post-pandemic housing boom. Developers launched projects rapidly between 2021 and 2023, supported by pent-up demand, lower interest rates for a period, and stronger buyer confidence. These projects are now reaching completion simultaneously.
According to the report, around 30.5 lakh housing units were delivered across India's top seven cities between 2017 and 2025, with the 5.4 lakh homes expected in 2026 alone accounting for a significant share of the nine-year total.
Regulatory and Technological Improvements
The report also noted that the implementation of RERA (Real Estate Regulatory Authority) has forced builders to maintain separate escrow accounts for project funds, reducing the risk of money being siphoned off to other projects, thereby improving financial discipline in the sector. Builders are now able to monitor construction timelines and procurement more efficiently with improved technology. “Developers are launching projects more cautiously, replacing the aggressive pre-launch cycles that once led to oversupply,” the report said.
Near-Term Challenges
However, the report cautioned that inflationary pressure arising from the Middle East crisis and water supply restrictions imposed by the BMC in Mumbai due to low reservoir levels may affect construction schedules. These factors could delay project completions and impact the demand for building materials in the near term.
