India's real estate sector demonstrated resilience in Q1 2026, absorbing supply effectively despite a notable slowdown in new launches, as outlined in a recent report by Equirus. The commercial leasing segment experienced a year-on-year increase of 6 percent, amounting to 29.9 million square feet, compared to 28.2 million square feet during the same quarter the previous year. This growth in leasing activity indicates robust demand, particularly from global capability centers, which saw their share of leasing rise from 44 percent in Q1 2025 to 48 percent in Q1 2026.
In terms of new launches, a significant surge was observed, with new supply increasing to 14 million square feet, a remarkable 154 percent rise from 5.5 million square feet a year ago. This uptick in launches reflects developers' responsiveness to market trends and demand dynamics. Regionally, Kolkata reported the highest quarter-on-quarter increase in leasing transactions, while the National Capital Region (NCR) saw the most substantial rise in new launches. These localized trends underscore the diverse performance across different markets within the country.
The residential segment is also undergoing a transformation, driven by a younger demographic. The report noted that approximately 74 percent of property buyers are now below the age of 35, a shift that has prompted developers to adapt their strategies. This demographic change influences various aspects of real estate development, including project design, apartment size, marketing approaches, and payment plans. On the supply side, housing activity remained robust, with a 10 percent year-on-year increase in housing supply and a 14 percent rise in prices across major cities during Q1 2026.
Despite the overall stability in demand, the report highlighted a slight moderation in demand on a sequential basis, indicating a 2.2 percent decline quarter-on-quarter. However, on an annual basis, demand showed a modest increase of 1.5 percent, reflecting ongoing resilience in the market. The findings suggest that while the real estate sector in India is navigating evolving buyer behaviors and regional performance variations, it continues to experience growth in both supply and demand, positioning itself for future opportunities amidst changing market dynamics.