India Housing Sales Pressure: Luxury Segment May See Inventory Pile-up by CY26
A new Nuvama report warns of pressure on India housing sales in CY26 due to affordability issues and a potential luxury inventory buildup.
The Indian real estate market is bracing for a challenging period ahead. According to a recent report by Nuvama, India housing sales pressure is expected to persist through Calendar Year 2026 (CY26), with a specific warning that the luxury housing segment may see a moderation in sales, potentially leading to a significant buildup of unsold inventory.
The Drivers of the Downturn
The brokerage identifies several critical factors that are weighing down the residential sector. The primary concerns include a decline in home affordability for the average buyer, a noticeable shortage of mid-income housing options, and sluggish job creation. Nuvama further suggests that these issues are exacerbated by a "K-shaped" economic growth pattern and global tariff wars, which make a long-term solution for volume growth difficult to achieve.
September 2026: A Tale of Two Trends
Data from September 2026 reveals a worrying trend in sales volumes. Overall housing sales saw a year-on-year (YoY) decline of 3 per cent and a sharp month-on-month (MoM) drop of 17 per cent. The regional breakdown shows significant stress in several major hubs:
- Mumbai Metropolitan Region (MMR) and Hyderabad: Both witnessed a steep 24 per cent YoY decline.
- Chennai: Sales dropped by 16 per cent YoY.
- Pune: Recorded a 9 per cent YoY dip.
In contrast, the National Capital Region (NCR) and Bengaluru stood out as the only bright spots, with absorption increasing by 3 to 6 per cent YoY during the same period.
The 'Premiumisation' Phenomenon
Interestingly, while the number of homes being sold is falling, the value of those sales is not dropping as sharply. This indicates a "premiumisation trend" where buyers are shifting toward higher-priced properties. Across the top seven cities, sales volumes fell by 8 per cent YoY in September 2026, but the sales value decreased by only 3 per cent.
This trend was particularly evident in the second quarter of the 2026-27 financial year (Q2FY27), where sales by value rose 12 per cent YoY. This growth was heavily driven by the NCR, which saw a massive 34 per cent surge, followed by growth of 11-12 per cent in both Hyderabad and the MMR.
Supply Crunch and Price Forecasts
The report also highlights a subdued environment for new project launches. In September 2026, supply declined by 14 per cent YoY and 26 per cent MoM. Furthermore, launches by value plummeted by 12 per cent YoY and 33 per cent MoM.
While the luxury and premium segments have performed well recently—pushing prices up across most major cities—Nuvama predicts this trajectory will slow down. The brokerage forecasts a moderation in price hikes for CY26, suggesting that price appreciation will likely be limited to the mid-single digits at best.