Home Prices Hit Record Highs

India's residential market is entering a more complex phase of growth. While home prices have climbed to record levels and premium housing continues to dominate new launches, questions are emerging over how long demand can remain insulated from rising costs, affordability constraints and an increasingly uneven supply mix. The debate has gained traction after PropTiger's Real Insight: Residential Jan–Mar 2026 report showed that the weighted average residential price across the top eight cities crossed Rs 10,000 per sq ft for the first time, even as sales moderated on an annual basis. The findings have also renewed debate over whether the sector's next growth cycle will be driven by broad-based homebuyer demand or an increasing concentration of activity in higher-value housing segments. Price Growth Meets Caution The report noted that the weighted average residential price across the top eight cities touched a record Rs 10,050 per sq ft in Q1 2026, crossing the Rs 10,000 threshold for the first time. At the same time, sales declined 2.2 per cent year-on-year to 95,973 units, suggesting that demand growth may be moderating even as property values continue to rise. Nesara BS, Chairman, Concorde, said that the crossing of the Rs 10,000 per sq ft threshold is a notable milestone, but it also highlights emerging affordability concerns. He noted that while incomes have risen across many urban markets, residential prices have increased at a faster pace in several cities. According to Nesara, the decline in sales suggests that price sensitivity among buyers is gradually increasing. While employment growth and homeownership aspirations continue to support demand, he cautioned that affordability could become a more significant challenge if housing prices continue to outpace income growth over a prolonged period. Luxury Segment Leads Demand The report showed that Mumbai MMR accounted for 29.2 per cent of all residential launches in Q1 2026 with 27,189 units. It also noted that premium and upper mid-income housing continued to dominate new supply across key markets such as Mumbai MMR, Bengaluru and Delhi-NCR, reflecting developers' growing focus on higher-value residential projects. Sam Chopra, President and Country Head, eXp Realty India, said the composition of new launches increasingly reflects where developers are seeing stronger demand visibility and healthier project economics. He noted that premium and upper mid-income housing have attracted a larger share of launches because these segments have demonstrated stronger absorption and greater resilience to pricing increases. Chopra, however, said a balanced housing market requires adequate supply across income categories. He added that if the gap between demand and supply widens in affordable and mid-income housing, it could create affordability challenges and limit participation from a large section of end-users. The report noted that the reduction in GST on cement from 28 per cent to 18 per cent has not been passed on to homebuyers, which could further exacerbate affordability concerns. The residential market's growth trajectory and the sustainability of demand will be closely watched in the coming months, as the sector navigates the challenges of rising costs, uneven supply, and affordability constraints.