Real estate sales in the National Capital Region (NCR) saw a notable downturn in the first half of 2026, with a 7% year-on-year decrease to just 24,862 units. This makes NCR the only major Indian market to record a decline in residential sales during this period, as highlighted by a recent report from Knight Frank India.
Factors Behind NCR's Underperformance
According to Knight Frank India, the NCR market's heightened sensitivity to shifts in sentiment has been a key factor. Recent geopolitical volatility has significantly impacted buyer confidence, leading to a moderation in end-user demand.
Another contributing issue is the supply-demand imbalance in certain price segments. Inventory priced under Rs 1 crore in prime micro-markets across Gurugram, Noida, and Delhi has been largely absorbed, with limited new affordable supply. Consequently, available properties are increasingly concentrated in the Rs 2 crore and above range, effectively pricing out a significant portion of potential end-users.
National Market Trends and Developer Responses
In contrast to NCR, residential sales across India's eight major cities collectively saw a marginal 1% increase, reaching 171,471 units in H1 2026, up from 170,201 units in H1 2025. Developers launched 187,350 new residential units nationwide during the same period, a 4% year-on-year rise and one of the highest volumes in the past decade. This surge in new supply has outpaced sales in most markets since 2022, creating an inventory overhang of approximately 15,879 units in the first half of this year.
New project launches have also predominantly focused on higher ticket sizes, with premium segment projects dominating and affordable housing additions remaining constrained. This widening gap between new supply and sales, coupled with existing inventory, has intensified supply-side pressures. In response, developers have increasingly offered demand-side incentives like flexible payment plans, subvention schemes, and stamp duty waivers to stimulate absorption.
Expert Insights and Market Outlook
Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, commented, “While growth has reduced following a steep recovery from pandemic lows, the market's underlying fundamentals remain firmly intact. Premium homes now account for more than half of all residential sales, reflecting rising household incomes, evolving buyer aspirations and growing confidence in long-term homeownership.”
Gulam Zia, International Partner, Senior Executive Director, Research, Advisory, Infrastructure and Valuation, Knight Frank India, added, “The rising share of premium housing reflects genuine affluence at the top end, yet it is also at the cost of affordable inventory being priced beyond the reach of many buyers. Inventory is building, absorption growth is slowing, and price growth is increasingly reliant on incentives rather than underlying demand. These are not indications of stress, but they are conditions that warrant close monitoring as the cycle matures.”
The operating environment remains challenging, with factors such as a pause in the rate-cut cycle, elevated energy prices, ongoing geopolitical tensions in West Asia, and concerns over AI-led disruption to white-collar employment all contributing to cautious buyer sentiment.
Price Appreciation Across Key Cities
Mumbai maintained its status as India's largest residential market by sales volume. In terms of price appreciation, Delhi and Faridabad led with an 18% year-on-year increase. Bengaluru recorded 9% growth, Noida 8%, and Hyderabad 7%. Gurugram and Greater Noida each saw a 6% annual appreciation, while Mumbai, Pune, Chennai, and Kolkata registered 5% growth. Thane experienced a 4% increase, and Navi Mumbai and Ahmedabad recorded a more modest 3% rise.