India Housing Affordability Faces A Tougher New Test

India’s housing market is entering a more selective phase, with home sales slowing across the largest urban markets while prices continue to rise. The Q2 2026 numbers point to a market that is still absorbing supply, but the widening affordability gap could become a bigger constraint for middle-income households, particularly in fast-growing cities.

Across eight major urban markets, 91,729 homes were sold between April and June, against 89,161 new launches. Sales fell 4.4% from the previous quarter and 6.1% from a year earlier, while launches declined 4.2% sequentially but remained 6% higher year-on-year. The more significant shift is visible in pricing. The sales-weighted average residential price reached ₹10,153 per sq ft, rising 1% quarter-on-quarter and remaining above ₹10,000 for a second straight quarter. With sales still marginally ahead of fresh supply, there is no immediate sign of a broad inventory glut. But affordability is becoming harder to ignore. Bengaluru recorded the steepest annual price increase among the tracked markets, with prices rising 26% even as annual sales declined. Independent market research also points to higher property values and growing pressure on mid-segment buyers in the city.

Pune presents another warning signal. Average prices crossed ₹8,000 per sq ft, while sales weakened sharply in annual comparisons. MMR remained the largest market by transaction volume and value, with average prices also recording strong annual growth. Ahmedabad, meanwhile, remained the lowest-priced of the eight markets at about ₹5,295 per sq ft. The divergence matters beyond property markets. Higher housing costs can push households towards longer commutes, smaller homes or peripheral locations, increasing pressure on transport networks, land use and urban infrastructure. For cities seeking lower-carbon growth, housing affordability and access to jobs and public transport are therefore closely linked.

RERA provides an important consumer-protection framework, requiring covered projects to be registered and promoting greater transparency in project information. But regulation cannot by itself solve the underlying affordability challenge. The next test is whether new housing supply remains accessible to ordinary wage-earning households rather than becoming increasingly concentrated in premium segments. The festive quarter will offer a clearer signal. If sales recover without another sharp acceleration in prices, the market may be finding a sustainable balance. If volumes weaken while prices continue climbing, developers, planners and policymakers will face stronger pressure to address housing affordability, connectivity and the availability of well-located homes.

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India Housing Affordability Faces A Tougher New Test