| | JANUARY 20269CHRONICLESHOMESCHRONICLESHOMESFor 2026, analysts expect this trend to persist, with housing demand becoming more segmented. Premium and upper mid-income categories are likely to remain resilient, while the affordable housing segment may require pricing corrections and policy support to regain momentum.Home Price Outlook: Growth with ModerationIndustry projections suggest housing prices in India will continue to rise in 2026, but at a more measured pace. Estimates indicate annual home price growth of around 5­10 percent, supported by fundamentals such as urbanisation, income growth, and limited new supply in key micro-markets.Cities like Bengaluru, Hyderabad, and parts of Mumbai Metropolitan Region (MMR) recorded notable residential price appreciation in 2025. However, developers are expected to adopt calibrated pricing strategies in 2026 to maintain affordability and sustain buyer interest, particularly among first-time homeowners.Affordability and Homebuyer SentimentHousing affordability remains a critical factor influencing homebuyer sentiment. Elevated prices relative to household incomes have kept many buyers on the sidelines, especially in large metros. That said, stabilising prices and the possibility of softer home loan interest rates could improve affordability conditions in 2026.Mid-income homebuyers are expected to drive incremental demand, particularly for 2BHK and compact 3BHK homes that balance price sensitivity with lifestyle needs. Developers focusing on value housing with efficient layouts and strong connectivity are likely to see healthier absorption.Demand Drivers Shaping the Housing MarketSeveral structural drivers will continue to underpin India's residential market in 2026. End-user demand, rather than speculative buying, remains the dominant force. Urban migration, nuclear family structures, and aspirations for homeownership continue to support long-term demand.At the same time, investor interest in housing is becoming more selective, favouring rental-yield-friendly locations, branded developers, and ready-to-move-in properties. This shift is reinforcing transparency and discipline across the housing ecosystem.Regional Shifts and Emerging CitiesWhile Tier I cities remain central to India's housing story, 2026 is expected to see increased traction in Tier II and emerging urban markets. Improved infrastructure, expressway connectivity, and decentralisation of employment hubs are making smaller cities attractive for both buyers and developers.
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