Residential price growth may moderate to 3% to 4% in FY26 due to moderating demand and several planned launches, which could increase the inventory, said India Ratings in a report released on Monday.
in the first nine months (9M) of FY25, the average price across the top eight cities increased at 8% yoy as compared to 21% YoY in FY24 and 14% y-o-y in FY23, the rating firm said.
The Bengaluru market witnessed the highest surge in prices in 9MFY25 at 23% yoy, followed by NCR (13% yoy) and Pune (12% yoy), it said.
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India Ratings also expects the growth momentum in residential property sales to taper down in FY26, due to the high base of FY25 and elevated price levels, which are up 8%-10% yoy.
The residential sales grew 32% yoy in FY24 in the top eight real estate cities – Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), National Capital Region (NCR) and Pune, it said quoting Liases Foras, a property research firm.
The rating firm expects overall sales to grow about 17% yoy to 593 million sq ft in FY25 and further decline to about 9% yoy in FY26. In 9MFY25, the MMR accounted for the largest micro-market with a 25% share among the top eight real estate cities, followed by Hyderabad and Pune. Chennai posted the highest growth of 46% yoy in 9MFY25 .
“FY26 is likely to see continued positive growth in bookings, although at a slower pace due to the base effect and moderation in affordability. Among the top eight cities, the NCR, Bengaluru, and the MMR are likely to remain relatively resilient in bookings, except for the luxury segment”, said Mahaveer Shankarlal Jain, Director, Corporate Ratings, India Ratings.
Developers may continue to experience positive growth in collections and operating cash flows, leading to a sustained strong balance sheet. This is enabled by sector consolidation and delayed launches amid limited unsold stock, Jain said
FY24 and 9MFY25 had seen a rise in the performance of Tier II and other players as the affordability dipped and buyers looked for alternatives to premium-priced apartments and houses by Tier I players. The ratings firm expects Tier I residential players to continue to lead and generate strong sales,
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