Mumbai, one of India's bustling metropolises, continues to showcase a vibrant residential real estate landscape. India's residential real estate sector is expected to witness a robust growth rate of 10% to 12% year-on-year in bookings by value for the financial year 2025-26, as reported by India Ratings and Research. This growth trajectory is largely driven by the increasing demand for housing, despite indications that the affordable housing segment, particularly units priced below Rs 1 crore, may experience a slight slowdown.
In the first half of the financial year 2025-26, a peer group of 11 publicly listed developers in major Tier-1 markets reported an impressive 21% year-on-year growth in sales volumes. Alongside this, blended realizations surged by 12%, highlighting the strong performance of the sector. Key factors contributing to this success include the consolidation favoring larger developers, enhanced brand recognition, and a consistent pipeline of new launches, which are crucial for sustaining interest in the realty market.
The growth momentum remains particularly strong in the top eight cities, with the Mumbai Metropolitan Region, National Capital Region, and Bengaluru leading the charge. However, it is important to note that some developers have faced approval delays, which have impacted new project launches and handovers. Mahaveer Shankarlal Jain, Director of Corporate Ratings at India Ratings, expressed optimism regarding the sector's performance, stating, "The FY26 outcomes are set to surpass our earlier projections, influenced by a high base effect and an improved product mix, particularly in the premium and luxury segments."
As the demand for larger, amenity-rich living spaces among upper-middle-income households grows, the residential real estate sector is likely to expand at a rate between 1x to 1.5x of the nominal GDP growth rate in the medium term. Despite the promising growth in pre-sales value, which saw a 33% increase in the first half of FY26, India Ratings also pointed out that the overall growth trends are beginning to show signs of divergence, with some developers experiencing declines in performance.
In conclusion, while the residential real estate market in India is on an upward trajectory, challenges remain, particularly in collection efficiency, as highlighted by the ongoing approval delays affecting project execution. As the sector adapts to these challenges and continues to innovate, it remains crucial for stakeholders to stay informed and responsive to market dynamics.