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Mumbai, 26^th August 2026: According to CareEdge Ratings, Indian residential developers are better positioned to navigate ongoing geopolitical uncertainty, as healthy collections, fundraising-led deleveraging, and greater financial discipline have strengthened their balance sheets. The debt-to-collections ratio has declined sharply from 1.80 times in FY20 to 0.68 times in FY26, reflecting sustained deleveraging across leading market players. While debt levels remained broadly range-bound during this period, healthy collections from sizeable launches rose to over Rs 90,000 crore, with bookings exceeding Rs 1.5 lakh crore in FY26.

This balance-sheet resilience
provides developers with a meaningful cushion against potential crisis-led pressures, including higher construction and energy costs, interest-rate volatility, tighter liquidity and near-term
demand uncertainty. As a result, financially stronger developers are better placed to maintain project execution and navigate a prolonged period of external volatility.
However, small and medium-sized developers are likely to face greater pressure due to weaker balance sheets, smaller project portfolios and limited financial flexibility to manage potential disruptions in demand, material supplies, energy-price volatility and rising input costs.

Shift to Premiumisation

CareEdge ratings notes that India’s new housing supply has shifted sharply towards premium homes in recent years. In Q1 2022, homes priced below Rs 1.5 crore accounted for 85% of new launches across the top 7 cities; by Q1 2025 this had fallen to 57%, and by Q1 2026 it stood at just 47%. Over the same period, the Rs 1.5–4 crore segment grew from a 14% share to 34% and then 44%, while homes priced above Rs 4 crore rose from just 1% to 9% of new launches.

Rajashree Murkute, Senior Director, CareEdge Ratings said, “This shift reflects developers' increasing focus on mid-premium and luxury housing, driven by customer preferences and rising land acquisition, construction and compliance costs that have impacted the viability of affordable housing projects. At the same time, sustained demand from affluent domestic buyers and NRIs, coupled with a preference for larger homes with premium amenities, has encouraged developers to allocate a greater share of new supply toward the luxury/ultra-luxury segments.”

Since 2022, India’s residential real estate market has witnessed a structural shift in demand toward premium and luxury housing, widening the divide from the affordable segment. Housing sales across the top seven cities declined by a low single-digit percentage in Q1 2026 compared with Q1 2025. However, demand trends varied significantly across segments. While the premium and luxury segments remained resilient, supported by affluent homebuyers and relatively lower sensitivity to inflation, demand in the affordable and middle-income segments softened amid inflationary pressures, elevated property prices and affordability constraints.

CareEdge Ratings notes that housing sales trends remained divergent across the top eight cities in Q1 2026. Sales declined by 11% in Pune and Delhi-NCR and by 7% in MMR, reflecting affordability pressures after sustained price appreciation, normalisation after a strong multi-year upcycle, and cautious buyer sentiment amid geopolitical and financial-market uncertainty. In contrast, southern markets remained comparatively resilient, with sales increasing by 9% in Chennai, 5% in Bengaluru and 1% in Hyderabad, supported by steady end-user demand, employment-linked housing requirements and new project activity. Kolkata and Ahmedabad also recorded moderate growth of 5% and 2%, respectively, aided by comparatively affordable pricing and stable local demand.

Overall, the trends indicate increasing divergence across cities, with high-priced western and northern markets moderating, while relatively end-user-driven southern markets continued to register growth.

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