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A strong pipeline of housing completions is expected to support demand for late-stage building materials over FY27-FY29, although near-term challenges such as inflationary pressures and water supply restrictions could affect construction timelines, according to a report by Equirus Securities.
The report said homes launched between 2022 and 2025 are expected to be delivered over FY27-FY29, driving demand for products such as tiles, bathware, paints, wood panels and adhesives. India's housing market entered a rebalancing phase in the first quarter of 2026, with demand declining for the second consecutive quarter by 2.2 per cent quarter-on-quarter, even as prices increased 14.1 per cent year-on-year. At the same time, "supply rose 6.8 per cent quarter-on-quarter and 10.1 per cent year-on-year, with strong activity in cities such as Gurugram, Bengaluru, Hyderabad, and Greater Noida," the report said. It added that end-user demand remained the primary driver of the housing market, with two- and three-bedroom units accounting for nearly 80 per cent of total demand, reflecting buyers' preference for practical housing formats. The report noted that the national new housing supply index reached 140.5 in the first quarter of calendar year 2026. Around 5.4 lakh housing units are scheduled for completion across India's top seven cities in 2026, the highest in a decade, reflecting strong demand for late-stage building materials following the post-pandemic housing boom. According to the report, developers launched projects rapidly between 2021 and 2023, supported by pent-up demand, lower interest rates for a period and stronger buyer confidence. These projects are now reaching completion simultaneously. It added that around 30.5 lakh housing units were delivered across India's top seven cities between 2017 and 2025, with the 5.4 lakh homes expected in 2026 alone accounting for a significant share of the nine-year total. The report also said "implementation of RERA (Real Estate Regulatory Authority) has forced builders to maintain separate escrow accounts for project funds, reducing the risk of money being siphoned off to other projects," improving financial discipline in the sector. It further noted that builders are able to monitor construction timelines and procurement more efficiently with improved technology. "Developers are launching projects more cautiously, replacing the aggressive pre-launch cycles that once led to oversupply," the report said. However, the report cautioned that inflationary pressure arising from the Middle East crisis and water supply restrictions imposed by the BMC in Mumbai due to low reservoir levels may affect construction schedules. (ANI)
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