India’s residential real estate market is witnessing varied trends across cities, with lower home loan interest rates supporting buyer sentiment in several regions while affordability continues to remain a concern in Mumbai and the National Capital Region (NCR), according to a market outlook report by real estate developer NBR Group.
The report stated that the Reserve Bank of India’s cumulative 125-basis-point repo rate cuts during the first half of 2026 have lowered borrowing costs, making home loans more affordable and encouraging housing demand in many markets.
“The Reserve Bank of India’s cumulative 125 basis points of repo-rate cuts through the first half of 2026 have made home loans meaningfully cheaper, and that relief is filtering through to buyer sentiment in most cities,” the report said.
However, the report noted that the impact of lower interest rates has differed across regions. It said Mumbai and the National Capital Region continue to remain beyond the reach of average homebuyers based on affordability benchmarks, despite lower borrowing costs and rising housing demand.
According to the report, residential property prices across major Indian cities have increased by up to 19% year-on-year, highlighting the growing affordability gap in key markets.
“Yet Mumbai and the National Capital Region remain stubbornly out of reach for the average household by affordability benchmarks,” the report stated.
Delhi-NCR, despite affordability challenges, recorded a 39% increase in new residential project launches. The report attributed the rise to infrastructure-led development corridors, which continue to attract developers.
“Delhi-NCR, somewhat counterintuitively, has also seen a 39 per cent jump in new launches — proof that infrastructure-led corridor growth can coexist with affordability strain rather than resolve it,” the report observed.
Bengaluru presented a contrasting trend, with more than 25,000 residential launches during the first half of 2026—the highest ever recorded in six months. Most new projects were concentrated in the city’s southern and eastern growth corridors.
“Bengaluru offers a useful counterpoint: residential launches touched a record half-year figure of more than 25,000 units, concentrated in the city’s southern and eastern growth corridors, suggesting supply is at least attempting to keep pace with demand in a way it isn’t everywhere else,” the report said.
The report concluded that India’s housing market is becoming increasingly segmented, with affordability, infrastructure growth and housing supply varying significantly across cities. While lower interest rates have improved demand, local market dynamics are playing a greater role in shaping the residential sector than nationwide trends.
Source: Money Control
