Crisil Sees Slower Housing Sales Growth in FY26

Crisil Ratings expects residential property sales to grow at a slower pace of 10–12 percent in FY26, compared to 12–14 percent in FY25.

The moderation follows three strong years of post-pandemic growth, where housing sales grew at a CAGR of 26 percent. Despite the slowdown, housing prices are projected to rise 4–6 percent over the medium term, a deceleration from the double-digit growth seen in previous years. The real estate market in FY25 saw flat demand due to high capital values and delays in project launches, attributed to state elections and changes in property registration rules.

Key Highlights

• Residential sales growth to slow to 10–12 percent in FY26, while prices grow 4–6 percent.
• Affordable housing launches to decline sharply due to cost pressures.
• Developers' debt-to-CFO ratio improves, backed by strong cash flows and QIP inflows.

However, demand is expected to rebound in FY26, supported by improving affordability, lower home loan interest rates, and steady demand for premium and luxury housing.

In contrast, affordable and mid-income housing segments are expected to shrink in share due to high land and raw material costs, accounting for just 10–12 percent and 19–20 percent of launches in 2025–26, down from 30 percent and 40 percent in 2020. Meanwhile, inventory levels are likely to rise slightly to 2.9–3.1 years.

Also Read: NRIs Reshape Indian Real Estate: Investment Share Soars to 20% in 2025

On the financial front, developers have deleveraged significantly, helped by strong cash flows, joint development models, and rising QIP (Qualified Institutional Placement) inflows. The debt-to-CFO ratio has improved to 1.1–1.3x, a major decline from 5.6x in FY20.

While the outlook remains stable, maintaining low leverage and controlling inventory will be key for credit health in the coming fiscal years.