Housing sales in India's top nine cities experienced a notable decline of 6% year-on-year in the third quarter of 2026, totaling 103,170 units, as reported by the real estate analytics firm PropEquity. This reduction is attributed to a cautious stance adopted by developers towards new supply, reflecting the varying market conditions across different cities and buyer segments. New launches decreased significantly, falling 15% quarter-on-quarter from 115,010 units in Q2 to 98,165 units in Q3, despite housing absorption remaining robust and exceeding the fresh supply by nearly 5,000 units during the quarter. This indicates a pronounced correction in supply, suggesting that demand is not currently keeping pace with the available housing inventory.
The decline in new supply was widespread, with several key markets experiencing substantial drops in launches. For instance, Thane saw a 28% decrease, followed by Chennai with a 22% decline, Delhi-NCR at 19%, and Pune at 17%. This trend highlights developers' cautious approach in adding inventory, driven by delays in project approvals and the need to manage existing stock. Arhanth Dinesh, Managing Director of Krishvi Group, pointed out that the market is currently facing challenges related to approval delays, cash preservation, and inventory clearance. Additionally, factors such as land availability and construction costs may also play a crucial role in shaping future pricing dynamics in the real estate sector.
As residential prices have risen significantly in recent months, the affordability of homes has emerged as a critical factor influencing buyer behavior. Major markets like Chennai and Pune reported the steepest annual sales declines, with drops of 17% and 16%, respectively, while other markets like Thane, Mumbai, and Delhi-NCR also experienced declines in absorption. Amit Modi, Director of County Group, remarked that while the current sales correction is notable, it does not signify a definitive demand ceiling, especially following a strong performance in Q2. He emphasized that rising prices have made buyers more discerning, leading to longer decision-making processes and a greater focus on the value proposition of available properties.
The disparities in supply and demand across different cities have become increasingly evident, especially in Hyderabad, where new launches surged by 68% year-on-year, accompanied by an 11% increase in sales. In contrast, other cities such as Pune, Chennai, and Thane have seen declines in absorption. This uneven demand landscape underscores the necessity for developers to adapt their strategies to align with changing buyer expectations and market conditions, as selective buying behavior continues to define the pace of absorption in the real estate market.
