Real estate prices rise 6% in Q1 FY27, led by Delhi, Noida & Chennai: Report

Real estate prices in India surged 6% year-on-year in the first quarter of fiscal year 27, with New Delhi, Noida, Chennai, Greater Noida, and Bengaluru leading the trend, according to a report by Kotak Institutional Equities. The rise in prices helped counterbalance a decline in sales volumes, as residential sales value increased 9% compared to the same period last year. The average realization reached Rs 9,629 per square foot, marking a 6% annual increase but a 2% drop from the prior quarter. The report cited a 9% YoY growth in residential sales value, attributed to both pricing gains and volume increases, with total sales standing at 247 million square feet during the quarter. The upward movement in prices occurred against a backdrop of reduced new supply, with project launches declining 14% YoY and 16% quarter-over-quarter to 242 million square feet. The National Capital Region saw the most pronounced drop in sales volumes, decreasing 27% YoY and 8% sequentially to 23.5 million square feet, while new launches in the area fell to 21.2 million square feet. In contrast, the Mumbai Metropolitan Region experienced a surge in sales, reaching 41.5 million square feet, bolstered by 33.8 million square feet of new launches. Bengaluru recorded sales of 30.7 million square feet, and Hyderabad reported 34.3 million square feet in sales, supported by 55.5 million square feet of new developments. The report emphasized that Bengaluru and Gurgaon have consistently shown stronger compound annual growth rates in prices across most projects, contributing to the overall rise in average realization. It noted that the industry’s recent expansion has primarily been fueled by price increases rather than a consistent uptick in sales volumes. “Industry growth over the past two years has been driven largely by pricing appreciation,” the report stated. “A sustained recovery in volumes would provide stronger confirmation of underlying demand strength.” Additionally, unsold housing inventory increased sequentially in Bengaluru, Hyderabad, and the National Capital Region, partially due to new project launches. As of June 2026, total unsold inventory across the country amounted to 1.8 billion square feet, equating to approximately 1.9 years of trailing 12-month sales. The report also pointed out that despite the continued stagnation in sales volumes, large developers have managed to expand their operations through geographic diversification and improved market share. This strategy has allowed them to maintain growth even as the broader sector remains range-bound for three consecutive years. The data underscores a complex landscape where price appreciation continues to drive the market, yet there remains uncertainty regarding the sustainability of this trend without a corresponding rise in transaction volumes. Looking ahead, the report suggests that further insights into the market will depend on whether there is a meaningful shift toward increased demand, which could be indicated by a more robust recovery in sales volumes. Until then, the real estate sector appears to remain in a state of cautious optimism, with price trends continuing to shape the current market dynamics. Developers and investors will likely keep a close watch on how these factors evolve in the coming quarters.