India's real estate: Lower loan rates help, but Mumbai, NCR pricey

Lower home loan rates are boosting India's housing demand, but affordability remains a major hurdle in Mumbai and NCR. A new report highlights these mixed trends, with cities like Bengaluru seeing record supply while Delhi sees new launches.

India's residential real estate market is showing mixed trends, with lower home loan rates improving buyer sentiment in many cities while affordability continues to remain a major challenge in Mumbai and the National Capital Region (NCR), according to a market outlook report by real estate developer NBR Group.

The report said the Reserve Bank of India's cumulative 125 basis points of repo rate cuts during the first half of 2026 have reduced borrowing costs and made home loans cheaper, providing support to housing demand across several cities. "The Reserve Bank of India's cumulative 125 basis points of repo-rate cuts through the first half of 2026 have made home loans meaningfully cheaper, and that relief is filtering through to buyer sentiment in most cities," the report said.

Affordability a Major Hurdle in Mumbai, NCR

However, the report noted that the benefits of lower interest rates have not been uniform across the country. It said Mumbai and the National Capital Region continue to remain beyond the reach of the average household on affordability measures, even as residential property prices across India's major cities have increased by as much as 19 per cent year-on-year. According to the report, the country's housing market is increasingly witnessing different trends across cities rather than moving in one direction. "Yet Mumbai and the National Capital Region remain stubbornly out of reach for the average household by affordability benchmarks," the report stated.

Contrasting Trends in Delhi-NCR and Bengaluru

The report highlighted that Delhi-NCR has simultaneously witnessed a sharp rise in new housing supply despite affordability concerns. It said new residential launches in Delhi-NCR jumped 39 per cent, indicating that infrastructure-led development corridors are encouraging developers to launch more projects even though affordability remains under pressure. "Delhi-NCR, somewhat counterintuitively, has also seen a 39 per cent jump in new launches -- proof that infrastructure-led corridor growth can coexist with affordability strain rather than resolve it," the report observed.

Bengaluru, meanwhile, presents a different picture. According to the report, the city has recorded more than 25,000 residential launches during the first half of 2026, the highest ever for a six-month period. Most of these launches have been concentrated in Bengaluru's southern and eastern growth corridors, suggesting that developers are attempting to match supply with growing demand. "Bengaluru offers a useful counterpoint: residential launches touched a record half-year figure of more than 25,000 units, concentrated in the city's southern and eastern growth corridors, suggesting supply is at least attempting to keep pace with demand in a way it isn't everywhere else," the report said.

A Segmented, Maturing Market

The report said these contrasting trends show that India's housing market is becoming increasingly segmented, with affordability, infrastructure development and supply conditions varying significantly across regions. According to the report, while lower interest rates are supporting housing demand, they alone are not enough to solve affordability challenges in some of the country's largest property markets.

The report added that India's real estate sector is entering a more mature phase where local market dynamics are playing a greater role than national trends. Instead of moving in a single direction, housing markets across cities are responding differently based on affordability, infrastructure expansion and the availability of new housing supply, making the residential sector more diverse than in previous years. (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)