Residential Realty Enters Calibrated Growth Phase: Crisil

31 Mar 2026 CW Team

In fiscal 2026, sales value growth is estimated to have slowed to 5–7 per cent as demand volumes remained largely stagnant amid elevated capital values and launch delays linked to approval challenges in some cities. In fiscal 2027, sales value growth is expected to soften further to 4–6 per cent, with both demand and average selling price growth flattening.

Average selling price growth is projected at 3–5 per cent in fiscal 2027, after an 11 per cent CAGR between fiscals 2022 and 2025 and an estimated 7–9 per cent rise in fiscal 2026. Demand growth is likely to remain flat at 0–2 per cent, although approval-related issues in Pune and the Mumbai Metropolitan Region are expected to ease. Bengaluru’s approval situation, however, remains a key monitorable.

Premium and luxury housing is expected to continue supporting demand, accounting for 38–40 per cent of total launches in fiscal 2027, up from around 12 per cent in fiscal 2022. For developers, this segment offers higher realisations and margins while strengthening collections.

Crisil Ratings expects industry collections to remain robust, supporting cash flow from operations growth of 15–17 per cent in fiscal 2027, backed by collections growth of 22–24 per cent. A study of 33 residential developers indicates that debt-to-CFO is likely to remain healthy at 1.1–1.3 times in fiscal 2027.

Inventory levels, however, are expected to rise slightly to 3.2–3.4 years in fiscal 2027 as supply continues to outpace demand. Lower-than-expected demand, aggressive launches and geopolitical uncertainties driving inflationary pressures remain key risks for the sector.

India’s residential real estate sector appears to have moved into a phase of calibrated growth after a strong post-pandemic expansion, during which sales value recorded a 26 per cent CAGR between fiscals 2022 and 2025. Despite moderating momentum, healthy collections and steady operating performance have helped developers maintain controlled debt levels and stable credit profiles.In fiscal 2026, sales value growth is estimated to have slowed to 5–7 per cent as demand volumes remained largely stagnant amid elevated capital values and launch delays linked to approval challenges in some cities. In fiscal 2027, sales value growth is expected to soften further to 4–6 per cent, with both demand and average selling price growth flattening.Average selling price growth is projected at 3–5 per cent in fiscal 2027, after an 11 per cent CAGR between fiscals 2022 and 2025 and an estimated 7–9 per cent rise in fiscal 2026. Demand growth is likely to remain flat at 0–2 per cent, although approval-related issues in Pune and the Mumbai Metropolitan Region are expected to ease. Bengaluru’s approval situation, however, remains a key monitorable.Premium and luxury housing is expected to continue supporting demand, accounting for 38–40 per cent of total launches in fiscal 2027, up from around 12 per cent in fiscal 2022. For developers, this segment offers higher realisations and margins while strengthening collections.Crisil Ratings expects industry collections to remain robust, supporting cash flow from operations growth of 15–17 per cent in fiscal 2027, backed by collections growth of 22–24 per cent. A study of 33 residential developers indicates that debt-to-CFO is likely to remain healthy at 1.1–1.3 times in fiscal 2027.Inventory levels, however, are expected to rise slightly to 3.2–3.4 years in fiscal 2027 as supply continues to outpace demand. Lower-than-expected demand, aggressive launches and geopolitical uncertainties driving inflationary pressures remain key risks for the sector.

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