Real estate prices across India grew 6% year-on-year in Q1 FY27, led by key cities like New Delhi and Bengaluru, says a Kotak Equities report. While pricing drove a 9% rise in sales value, volume growth was modest at 3% amid a drop in new launches.
Real estate prices grew 6 per cent YoY at all India-level in first quarter of the Financial Year 2027, led by New Delhi, Noida, Chennai, Greater Noida and Bengaluru, according to a research report by Kotak Institutional Equities.
The report noted that most projects in Bengaluru and Gurgaon saw higher price compound annual growth rate (CAGR) over the past few years, helping lift overall real estate realization across major micro-markets. "Average realization rose to Rs 9,629/sq. ft (+6% YoY, -2% QoQ), offsetting the impact of lower volumes and aiding 9% YoY increase in sales value," the report highlighted.
Modest Sales Volume Amid Launch Contraction
All-India residential sales in the first quarter remained modest at 247 million square feet, marking an increase of 3 per cent YoY and a sequential decline of 3 per cent. This modest performance was impacted by a drop in new project launches, which contracted to 242 million square feet, down 14 per cent YoY and 16 per cent QoQ.
"Residential sales value grew 9% YoY 1QFY27, led by pricing growth of 6% YoY and volume growth of 3% YoY," the report stated.
Regional Market Performance
Volume weakness across the country was led by NCR, where residential sales declined to 23.5 million square feet, down 27 per cent YoY and 8 per cent sequentially, as launches in the region dropped to 21.2 million square feet. Conversely, sales volumes improved across other prominent markets. MMR sales increased to 41.5 million square feet, backed by launches of 33.8 million square feet. Bengaluru recorded sales of 30.7 million square feet, while Hyderabad reached 34.3 million square feet, driven by new project launches of 55.5 million square feet.
"Notably, industry growth over the past two years has been driven largely by pricing appreciation," the report added. "A sustained recovery in volumes would provide stronger confirmation of underlying demand strength."
Inventory and Market Dynamics
Unsold inventory in absolute terms increased sequentially in Bengaluru, Hyderabad and NCR on the back of new launches. Total unsold inventory across India stood at 1.8 billion square feet as of June 2026, translating to approximately 1.9 years of trailing 12-month sales.
"Industry volumes have remained range-bound for three years in a row, even as larger developers continue to grow through a combination of geographical diversification and improving market share," it noted. (ANI)
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