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India's housing sector is likely to face continued pressure on sales volumes in CY26, meanwhile luxury housing sales are expected to moderate, leading to a buildup of inventory in this segment, according to a report by Nuvama.
As per Nuvama, this pressure will likely come on the back of declining home affordability, limited availability of mid-income housing and weak job creation. The brokerage noted in its report that housing sales declined 3 per cent year-on-year (YoY) and 17 per cent month-on-month (MoM) in September 2026. This was driven by a 16 per cent YoY drop in Chennai, 9 per cent in Pune, and 24 per cent each in the Mumbai Metropolitan Region (MMR) and Hyderabad. However, The NCR and Bengaluru were the only two cities that witnessed absorption rising 36% YoY each in Sep-26, it noted. Nuvama highlighted, the sector is witnessing a premiumisation trend, as the decline in housing sales volumes was sharper than the fall in sales value. Across the top seven cities, housing sales volumes declined 8 per cent YoY in September 2026, while sales value fell by just 3 per cent YoY, indicating a shift towards higher-priced properties. Meanwhile, new housing launches across these cities remained subdued, with supply declining 14 per cent YoY and 26 per cent month-on-month (MoM) during the month. It further added that housing sales by value rose 12 per cent YoY and 6 per cent quarter-on-quarter (QoQ) in the second quarter of financial year 2026-27 (Q2FY27), driven by a 34 per cent YoY surge in NCR, followed by 1112 per cent growth each in Hyderabad and the Mumbai Metropolitan Region (MMR). At the same time,Launches by value declined 12% YoY/33% MoM in Sep-26, it noted, adding, Given the luxury/premium housing segment is performing well, prices have surged across most major cities. Overall, Nuvama believes, there is unlikely to be a long-lasting solution to concerns around: weak volume growth in light of falling home affordability and inadequate availability of mid-income houses and job generation (Link) amid tariff wars/K-shaped growth in the economy. We forecast a moderation in increasing housing prices in CY26; we believe price appreciation will be in mid-single digit at best, it said. (ANI)
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