Housing price growth to slow to mid-single digits in CY26, says Nuvama

NEW DELHI: India’s housing market is shifting from a volume-led growth cycle to a price-driven premiumisation phase, with a moderation in housing price growth expected in CY26, says Nuvama. According to the report, housing sales value in May 2026 rose 17 per cent YoY and 2 per cent MoM, with southern cities recording the strongest annual growth, while sales volumes grew 6 per cent YoY.

On a YTD CY26 basis, “housing demand by value surged 13 per cent YoY, led by Bengaluru (+39% YoY) and Chennai (+26% YoY). Absorption in Kolkata and the MMR increased 11-13% YoY, while other major cities posted growth of 4-8% YoY.”

Meanwhile, “Launches by value declined 18% YoY/12% MoM in May-26, falling across all cities, except Hyderabad,” the report noted. Furthermore, “launches fell 14 per cent YoY/MoM in May-26 at the pan-India level (top seven cities)” by volume.

At the same time, homebuyers are increasingly purchasing higher-priced homes, even though the number of homes being sold is growing at a much slower pace. It added, “premiumisation trend is still playing out in the industry, which is evident from the fact that a rise in sales value in May-26 (up 17% YoY) is higher than the 6% YoY rise in sales by volumes across the top seven cities.”

According to the report, premium/luxury housing demand continues to support price growth across major markets. “Average prices rose 18-19% YoY each in the NCR and Chennai in May-26 followed by ~11% YoY expansion in Bengaluru,” it added.

At the same time, “Increase in average prices and unit sizes have led to a surge in ticket size across geographies.” Nuvama believes structural concerns around weak housing volume growth are unlikely to ease meaningfully, given deteriorating affordability, limited supply of mid-income homes, and subdued job creation amid tariff-related uncertainties and a K-shaped economic recovery.

As per Nuvama, “housing volumes would remain soft until developers: i) reduce focus on luxury segment and reorient towards mid-income/premium segment and ii) focus on improving affordability by keeping prices/ticket size restricted.”

As per Nuvama, “unless developers take a concerted decision to target the mid-income segment, housing volumes shall remain sluggish in the near term.” Adding to this, the report “forecast a moderation in increasing housing prices in CY26,” stressing “price appreciation will be in mid-single digit at best.” (ANI)