Residential property sales volumes across India’s top seven cities remained stagnant for the third consecutive year in fiscal year 2026. However, the total value of bookings witnessed a significant 7% year-on-year increase, reaching Rs 7 lakh crore, according to a report by JM Financial, citing Propequity data.
This growth in booking value, despite flat volumes, is primarily attributed to a pronounced shift in demand from affordable housing segments towards mid-income and premium homes. JM Financial noted that this polarisation has kept overall industry volumes flat even as realisations improved sharply.
Listed Developers Outperform Broader Market
Listed real estate developers continued to demonstrate strong performance, outstripping the broader market. The top 14 listed companies collectively reported a 20% year-on-year growth in pre-sales for FY26, expanding their market share to approximately 20% of the total.
This trend is supported by several factors, including stronger execution capabilities, enhanced brand recall among consumers, and a sustained preference shift towards larger, established developers. Furthermore, fresh project additions valued at over INR 2 trillion have significantly improved near-term visibility for these companies.
Premium Housing Drives Value Growth
While residential sales volume stood at 648 million square feet in FY26, remaining broadly flat since FY24, the blended realisation per square foot rose at an 11% Compound Annual Growth Rate (CAGR) from FY24 to FY26. This increase is a direct result of the shrinking affordable housing segment and a simultaneous surge in demand for premium properties.
- Units priced below Rs 1 crore saw a 22% decline since FY24.
- Units priced above Rs 10 crore recorded a 13% CAGR over the same period.
The report attributes this premium segment growth to rising upgrade aspirations among buyers, an expanding pool of high-income families, and sustained investment interest from Non-Resident Indians (NRIs).
Inventory Levels and Future Growth Pipeline
Despite the weak volume trend, unsold inventory levels remain under control. Industry-wide unsold stock stood at approximately 940 million square feet, translating into an overhang of 17 months. JM Financial considers this broadly within historical comfort zones, typically associated with steady price increases.
In the listed space, the top 14 companies posted cumulative bookings of Rs 1.47 lakh crore in FY26, marking a 20% year-on-year increase. Sobha led this growth with a 30% rise in bookings, while Godrej Properties (GPL) and Lodha Developers each posted 16% growth. Smaller listed entities like Keystone Realtors and Sunteck also recorded impressive growth rates of 25-30%.
Listed developers have strategically leveraged the strong pre-sales cycle of recent years to bolster their future growth pipelines. The group generated operating cash flow of about Rs 35,000 crore, largely redeployed into land acquisitions and new project tie-ups. Collectively, these players added new projects worth over Rs 2 lakh crore through outright purchases and joint development/venture arrangements. These additions were broad-based geographically, with several companies expanding into new micro-markets and cities, providing clear visibility for sustained growth rates if launches remain timely.
Macro Headwinds and Valuation Outlook
JM Financial noted potential macro headwinds, including AI-led disruptions to market sentiment, rising inflation, and the risk of higher interest rates. Inflationary pressures linked to ongoing geopolitical conflicts have added to these concerns. However, demand, particularly in the mid-income segment, has remained resilient thus far.
While valuations have corrected meaningfully, with embedded EBITDA multiples roughly half their peak levels, any re-rating is expected to be gradual in the absence of a strong near-term positive trigger.
JM Financial's Top Real Estate Picks with 'Buy' Ratings:
- DLF: Target Price: Rs 775
- Lodha Developers: Target Price: Rs 1,200
- Godrej Properties: Target Price: Rs 2,250
- Oberoi Realty: Target Price: Rs 1,920
- Sobha: Target Price: Rs 1,775
- Brigade Enterprises: Target Price: Rs 920
- Keystone Realtors: Target Price: Rs 560