The report highlighted a gap between housing sales volumes and value growth over the past two years.

Unsold housing inventory in India increased to around 18 months in the first quarter of CY26 as residential supply continued to outpace demand, according to a report by Anand Rathi.

Unsold inventory is measured in terms of "months of sales", indicating the time required to sell the available stock at the current sales pace.

The report said residential project launches remained high due to easy funding availability, capital-light land deals and optimism from the previous growth cycle. As a result, unsold inventory rose from nearly 14 months in CY24 to around 18 months in Q1CY26.

At the same time, housing sales moderated from a peak of about 4.8 lakh units in CY23 to nearly 4 lakh units in CY25, reflecting a negative compound annual growth rate (CAGR) of around 9 per cent.

"Despite residential decline in volume with units falling from ~4.8 lakh units in CY23 to ~4 lakh units in CY25, residential value grew from ₹4,870 bn to ₹6,006 bn during same period, revealing a clear value-volume dichotomy," the report said.

According to the report, the slowdown is mainly due to a high base effect, affordability pressures, disruptions in the IT sector and wealth erosion following corrections in stock market indices. However, it added that the current trend represents a volume correction rather than a structural weakness in demand.

The report highlighted a gap between housing sales volumes and value growth over the past two years.

"In growth terms, value CAGR has decelerated from ~76 per cent in CY20-23 to ~11 per cent in CY23-25, prompting a segment-wise volume analysis," it said.

The analysis showed that the affordable and lower mid-income housing segment, with property prices below ₹80 lakh, was the first to face pressure. Growth in this category slowed to around 3 per cent year-on-year in CY23 before declining sharply in CY24 and CY25.

The slowdown in this segment was driven by steep declines in NCR, Bengaluru and Hyderabad, although MMR continued to show positive growth of 35 per cent.

The report said stress widened across markets in CY24 and deepened further in CY25, with all major micro-markets entering contraction territory.

"Pan-India volume consequently declined ~28 per cent y/y in CY25, with Hyderabad (~57 per cent) and NCR (~34 per cent) recording the steepest falls," the report added.

The mid-income segment, comprising homes priced between ₹80 lakh and ₹1.5 crore, followed a similar trend. Growth slowed to around 1 per cent in CY24 and contracted nearly 8 per cent in CY25.

This category had recorded strong growth in CY23, with pan-India sales volumes rising about 92 per cent year-on-year. However, sales weakened sharply in CY24 as key markets such as NCR, Hyderabad, Bengaluru and MMR moved into contraction.

The decline intensified in CY25, with most markets reporting lower sales. Chennai was the only major market to post growth, rising 23 per cent during the year.

The report also noted a slowdown in the premium housing segment, comprising properties priced above ₹1.5 crore. Although this segment remained relatively resilient, growth moderated from CY24 and slowed to around 6 per cent year-on-year in CY25.

Pan-India premium housing volume growth eased from around 149 per cent in CY22 to nearly 86 per cent in CY23 and about 17 per cent in CY24.

Among major markets, MMR was the first to see a decline, with premium sales falling around 15 per cent in both CY24 and CY25. Hyderabad also recorded a 7 per cent contraction in CY25. NCR and Bengaluru continued to lead the premium housing market, but growth moderated significantly from the higher levels seen in previous years.

Published on June 25, 2026