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Indian Housing Market Hits 17-Quarter Sales Low

  //house-home.news-articles.net/content/2026/02/1 .. an-housing-market-hits-17-quarter-sales-low.html
  Published in House and Home on Thursday, February 12th 2026 at 15:11 GMT by moneycontrol.com
      Locales: Maharashtra, Karnataka, Delhi, Tamil Nadu, INDIA

New Delhi, February 12th, 2026 - The Indian housing market is experiencing a significant slowdown, with sales figures for the July-September 2023 period marking a 17-quarter low, according to recent analysis from Knight Frank. This downturn isn't isolated to sales; new project launches have also decreased, indicating a widespread caution rippling through the development sector. The data, initially reported in Q3 2023, continues to resonate and has deepened into a more sustained cooling trend observed over the subsequent years.

Knight Frank's India Real Estate Report for Q3 2023 revealed a 16% year-on-year decrease in new home launches, totaling 65,728 units - the lowest figure since the pandemic-impacted Q3 2020. Simultaneously, total sales across major Indian cities plummeted 18% year-on-year to 73,379 units. What was initially perceived as a temporary festive season lull has morphed into a more persistent challenge for the industry.

From Festive Fizzle to Prolonged Cooling: A Deeper Dive

The initial reports correctly identified the fading festive cheer as a contributing factor. Traditionally, the festival season - particularly around Diwali - fuels a surge in property purchases. However, the 2023 festive season failed to deliver the expected boost, and the slowdown has continued well into 2024 and 2025. This indicates that the issues impacting the market are more systemic than a simple lack of seasonal demand.

Several key factors are now understood to be at play. Rising interest rates remain a primary concern. Since 2023, the Reserve Bank of India (RBI) has maintained a relatively hawkish monetary policy, aimed at controlling inflation. While inflation has eased somewhat, interest rates on home loans have remained elevated, significantly increasing the cost of homeownership and diminishing affordability. The impact is particularly pronounced for first-time homebuyers.

"The rising cost of borrowing has undoubtedly dampened buyer enthusiasm," explains Anshul Jain, Managing Director, India, Knight Frank, in a recent interview. "Combined with stagnant wage growth in many sectors, the dream of owning a home is becoming increasingly out of reach for a larger segment of the population."

Beyond affordability, a broader sense of economic uncertainty is contributing to buyer hesitancy. Geopolitical tensions, fluctuating global markets, and concerns about a potential recession have created a climate of caution. Prospective homebuyers are delaying purchases, preferring to wait for greater economic stability and more favorable lending conditions.

Developer Response: A Shift Towards Calculated Risk The decline in new launches is a direct response to these market dynamics. Developers are adopting a more conservative approach, delaying new project announcements and focusing on completing existing projects. This strategy aims to avoid oversupply and minimize financial risk. We are seeing a trend towards smaller, more targeted developments that cater to specific niche markets rather than large-scale, ambitious projects.

Regional Disparities and Emerging Trends The impact of the slowdown hasn't been uniform across all regions. As initially noted, Mumbai and the National Capital Region (NCR) experienced the most significant declines in sales. However, certain southern cities, like Hyderabad and Bangalore, demonstrated relative resilience, benefiting from strong IT sector growth and a more robust local economy.

Interestingly, the premium housing segment (properties valued above INR1.5 crore) has proven more resistant to the downturn compared to affordable housing. This suggests that high-net-worth individuals are less sensitive to interest rate fluctuations and economic uncertainty. The demand for luxury homes, particularly those with premium amenities and sustainable features, remains strong.

Looking Ahead: A Cautiously Optimistic Outlook The near-term outlook for the housing market remains subdued. Analysts predict that sales and launches will likely remain flat or experience modest declines throughout 2026. However, long-term fundamentals remain positive. India's growing population, increasing urbanization, and rising disposable incomes continue to drive demand for housing. Government initiatives, such as the 'Housing for All' scheme, also provide a crucial support.

"While the current market conditions are challenging, we remain optimistic about the long-term prospects of the Indian real estate market," concludes Jain. "We anticipate a gradual recovery as interest rates stabilize, economic conditions improve, and government policies gain traction. The key will be for developers to adapt to the changing market dynamics and focus on delivering high-quality, affordable homes that meet the evolving needs of Indian homebuyers."

The industry is now focused on innovation in construction technology, sustainable building practices, and customer-centric approaches to navigate these challenging times and prepare for a more sustainable and resilient future.