NCR real estate market underperforms; sales decline 7% in first half of 2026

Real estate sales in the National Capital Region (NCR) declined 7% year-on-year to 24,862 units for the first six months of 2026, becoming the only standout underperformer across India, according to Knight Frank India.

The NCR market has historically carried a higher degree of sensitivity to any shift in sentiment as end-user demand moderates, the property consultancy said in a report. The recent volatility in geo-political conditions has impacted the market sentiments significantly, it said.

Inventory priced under Rs 1 crore in premium micro-markets across Gurugram, Noida and Delhi has been absorbed with limited replacement supply, leaving available product increasingly concentrated in the Rs 2 crore and above range and pricing out a significant share of end-users, the report said.

According to Knight Frank India's latest report, residential sales across the eight major cities stood at 171,471 units, a marginal 1% increase over the 170,201 units sold in H1 2025.

Developers launched 187,350 residential units in H1 2026, a 4% year-on-year increase and among the highest volumes recorded for any first half in the past decade.

New supply has now exceeded sales in most markets across successive periods, a trend in place since 2022, with the launches-to-sales gap at approximately 15,879 units during the half-year. The composition of new supply stayed skewed toward higher ticket sizes, with premium projects dominating launches while affordable additions remained constrained.

“The persistence of this gap, together with the existing inventory overhang, has reinforced supply-side pressure in the system. In response to moderating sales velocity, developers increasingly deployed demand-side incentives, including flexible payment plans, subvention schemes and stamp duty waivers, to sustain absorption,” the real estate consultancy said.

In its outlook, Knigh Frank said the operating environment has also become more challenging, with the pause in the rate-cut cycle, elevated energy prices, geopolitical tensions in West Asia, and concerns over AI-led disruption to white-collar employment weighing on buyer sentiment.

Mumbai retained its position as India's largest residential market by sales volume, supported by sustained end-user demand and continued activity across both premium and mid-segment housing.

Bengaluru emerged as the strongest-performing market among the top cities, registering the highest annual growth in sales.

“While growth has reduced following a steep recovery from pandemic lows, the market's underlying fundamentals remain firmly intact. Premium homes now account for more than half of all residential sales, reflecting rising household incomes, evolving buyer aspirations and growing confidence in long-term homeownership,” said Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India.

“The rising share of premium housing reflects genuine affluence at the top end, yet it is also at the cost of affordable inventory being priced beyond the reach of many buyers. Inventory is building, absorption growth is slowing, and price growth is increasingly reliant on incentives rather than underlying demand. These are not indications of stress, but they are conditions that warrant close monitoring as the cycle matures,” said Gulam Zia, International Partner, Senior Executive Director, Research, Advisory, Infrastructure and Valuation, Knight Frank India.

 Mumbai remained the country's most expensive residential market, with average prices at Rs 36,881 per sq. ft., followed by Delhi (Rs 26,027 per sq. ft.) and Gurugram (Rs 18,354 per sq. ft.), reflecting the premium commanded by these key metropolitan markets. In terms of price appreciation, Delhi and Faridabad emerged as the strongest-performing markets, each recording an 18% year-on-year increase. Bengaluru recorded 9% YoY growth, while Noida posted 8% and Hyderabad registered 7%. Gurugram and Greater Noida each witnessed 6% annual appreciation, while Mumbai, Pune, Chennai, and Kolkata recorded 5% growth. Thane saw a 4% increase, while Navi Mumbai and Ahmedabad registered a relatively modest 3% year-on-year rise.