Residential Real Estate Price Growth Likely to Slow in 2026

Publised by Business Standard on Thu | Dec 18 | 2025

Homebuyers are now exploring emerging neighborhoods and peripheral micro-markets, where homes are more affordable without compromising on comfort. With better connectivity and new infrastructure, these areas offer a smart balance of value, livability, and long-term growth.

As 2025 draws to a close, India's residential property market is showing signs of stabilisation after several years of strong post-pandemic growth. While demand for homes remains steady and infrastructure development continues across major cities, the pace of residential real estate price growth is expected to slow down further in 2026.

Over the past few years, residential prices in India have grown by double digits, especially in the premium housing segment. However, current trends indicate a shift. Preliminary data for 2025 suggests that price growth has moderated to single-digit levels, averaging around 8 - 9 percent across the top seven cities. This change reflects growing concerns around affordability in residential real estate, which is now playing a key role in shaping buyer decisions.

According to market experts, the Indian housing market in 2026 will remain potent but more selective. Buyers are becoming cautious and are focusing on long-term financial comfort rather than short-term price appreciation. Rising home prices, fluctuating interest rates, and rising living costs are prompting buyers to evaluate their purchase decisions more carefully.

Ajay Malik, Chief Strategy Officer at Rise Infraventures, believes that buyers should broaden their outlook when searching for homes. He advises end users to explore emerging corridors in real estate and nearby developing locations that offer better value for money. These areas often provide modern infrastructure, improved connectivity, and a better balance between pricing and liveability.

He further highlights the growing importance of peripheral micro-markets, which are gaining popularity among homebuyers. These micro-markets, located slightly away from city centres, are witnessing strong development driven by new roads, metro projects, and social infrastructure. Properties in such locations are generally more affordable and offer higher long-term growth potential.

Malik also emphasises the need for financial planning. He states that affordability has become more critical than ever, and buyers must realistically assess whether their EMIs will remain manageable even if interest rates fluctuate. In addition to loan repayments, daily living expenses, maintenance costs, and total ownership expenses should be carefully considered.

To reduce risk, buyers are increasingly opting for ready-to-move-in homes or projects nearing completion. Flexible, staggered payment plans are also helping buyers manage their finances more effectively in a high-priced environment.

Looking ahead, the residential real estate sector is expected to move toward sustainable and steady growth in 2026. While sharp price increases may be limited, the market will continue to offer opportunities for informed buyers who prioritise affordability, location advantages, and long-term value.

1. Why is residential real estate price growth slowing in 2026?

Price growth is moderating due to affordability concerns, rising living costs, and fluctuating interest rates. Buyers are focusing on long-term financial comfort over short-term gains.

2. What has been the recent trend in home prices?

After years of double-digit growth, residential prices in top cities have slowed to around 8 - 9% in 2025, reflecting a more balanced market.

3. Which locations should buyers consider in 2026?

Emerging corridors and peripheral micro-markets offer better value, modern infrastructure, improved connectivity, and strong long-term growth potential.

4. Why are peripheral micro-markets gaining attention?

These areas, slightly away from city centers, are affordable, well-connected, and benefit from new roads, metro projects, and social infrastructure developments.

5. How can buyers manage affordability effectively?

Careful financial planning is key. Buyers should evaluate EMIs, living costs, and total ownership expenses while opting for ready-to-move-in homes or flexible payment plans.