India's residential real estate market is poised to stay resilient in the second half of 2026, supported by strong demand for premium housing, ongoing urbanisation, and infrastructure-led development, according to a report by Knight Frank India. The sector is expected to enter a phase of consolidation rather than correction, with stable fundamentals underpinning the market.
Strong H1 2026 Sales Performance
Knight Frank India reported that the first half of 2026 delivered one of the strongest half-year sales performances of the past decade. Residential sales across eight major cities reached 171,471 units, while developers launched 187,350 units. Homes priced above Rs 1 crore accounted for 54% of total sales, up from 49% a year earlier, indicating a clear shift towards premium housing.
Shishir Baijal, International Partner, Chairman and Managing Director of Knight Frank India, said, “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.”
Market Consolidation, Not Correction
The report emphasises that the market is entering H2 2026 in a phase of consolidation rather than correction. Key supportive factors include ongoing urbanisation, stable employment, lower home loan rates following cumulative monetary easing, and stronger developer balance sheets. However, the report cautions that sales have plateaued, new launches are outpacing absorption, unsold inventory is gradually rising, and price growth is increasingly concentrated in premium and luxury housing segments.
Knight Frank noted that developers may increasingly rely on demand-side incentives such as flexible payment plans, subvention schemes, and stamp duty waivers if launches continue to exceed sales during the remainder of the year. Despite these challenges, RERA-led reforms, better capital discipline, and the growing presence of well-capitalised developers are expected to keep the market stable, making a sharp correction unlikely.
Shift Towards Premium Housing
The data reveals a continued shift towards premium housing, with homes priced above Rs 1 crore now making up more than half of total sales. This trend reflects evolving buyer preferences, as buyers increasingly prioritise quality, location, and long-term value. The report also highlights that affordable housing supply remains constrained, making the market more selective.
Knight Frank said stable economic fundamentals, infrastructure investment, and evolving buyer preferences continue to support the sector. The consultancy added that the balance between demand recovery, inventory levels, and pricing discipline will determine how the residential market performs through the rest of 2026.
Outlook for H2 2026
Looking ahead, Knight Frank expects the residential market to remain stable, supported by urbanisation and infrastructure development. The report underscores that while growth has moderated, the market's fundamentals are strong enough to avoid a sharp downturn. Developers are likely to adopt cautious strategies, focusing on premium segments and offering incentives to attract buyers.
The report concludes that the Indian residential real estate market is well-positioned to navigate the second half of 2026, with premium housing demand and urbanisation acting as key drivers. However, stakeholders must monitor inventory levels and pricing discipline to ensure sustained growth.
