Premiumisation to drive residential sales value growth by 8-11% in 2026-27: ICRA
Sales area in the top seven cities expected to rise by 2-5% to 665-685 msf in 2026-27
Sector consolidation raises share of key listed developers to around 23% of the industry’s sales value
Rating agency ICRA forecasts the growth in the sales value in the top seven cities in India to increase at a robust 8-11% in 2026-27, supported by higher realisations and a favourable product mix, even as area sold is expected to grow by a modest 2-5%. The sales value is likely to increase at a CAGR of 7-9% to Rs. 7.7-8.2 lakh crore during 2023-24 to 2026-27, while the area sold remains largely flat.
ICRA noted that area sold registered a marginal growth of 1.5% to 653 msf in 2025-26 on a high base, amid slowdown in project launches during most part of the year. Launch activity improved by 5% YoY in 9M 2025-26, before rebounding sharply with an 18% YoY increase in Q4 2025-26. Demand remained resilient in the luxury segment, where area sold grew by 14%, while the mid-income segment witnessed a mild growth of 2%. In contrast, the affordable segment witnessed a 9% decline. In Q1 2026-27, the area sold increased by 9% YoY, largely driven by favourable launches in Q4 2025-26.
Giving more insights, Anupama Reddy, Group Head & Vice President – Corporate Ratings, ICRA, said: “ICRA projects the area sold in the top seven cities at 665-685 msf in 2026-27, supported by sustained demand in the mid-and-luxury housing segments and an increasing preference for established listed developers. Launch activity is expected to increase by 4-7% to 760-785 msf, aided by comfortable inventory levels. Average selling prices are likely to witness a moderate 4-7% rise, following a sharp appreciation seen over the last few years. Although sales velocity has softened from the peak levels, developers' calibrated approach to launches is expected to maintain a healthy market balance, with the years-to-sell ratio remaining comfortable at 1.4-1.6 times by March 2027.”
(1) The top seven cities include Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru, Hyderabad, Pune, Kolkata, Chennai
Source: Propequity, ICRA Research
The premiumisation trend in the residential real estate sector continues to gather pace, with the share of mid and luxury housing steadily increasing to 34% and 46% of sales volumes, respectively in 2025-26. This shift is also reflected in the inventory profile, with the unsold inventory increasingly concentrated in these segments, while the share of affordable housing has gradually declined. Despite this change in the mix, the inventory overhang remains comfortable. The years-to-sell (YTS) ratio rose slightly to 1.4-1.5 years, indicating that inventory creation remains broadly aligned with the prevailing demand trend.
Commenting on sector consolidation, Reddy added: “The ongoing premiumisation of demand has also accelerated industry consolidation in favour of organised and listed developers. The market share of key listed real estate companies increased to around 23% of total industry sales value in 2025-26 from 15% in 2020-21, reflecting growing preference for developers with a strong execution track record, established brands and better access to capital. Consequently, prominent listed developers are expected to continue outperforming broader market growth, supported by robust collections, healthy operating cash flows and comfortable leverage levels. This trend is likely to sustain over the medium term, while the overall outlook for the residential real estate sector remains Stable.”
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