Steady Growth in Residential Sales: Insights from ICRA

Overview of Residential Sales Growth

According to a recent analysis by ICRA, residential real estate developers are poised for stable sales growth of 10-12% in the current and upcoming financial years. This growth follows a robust recovery period post-pandemic, driven by a combination of factors including lower interest rates and increasing demand for premium and luxury housing.

Factors Influencing Growth

The anticipated growth is expected to stem from a 5-7% increase in sales volume and a 4-6% rise in average realizations. The analysis, based on a sample of 75 developers representing about 35% of residential sales nationwide, indicates that the demand for housing is stabilizing after a significant surge over the past three years.

Market Dynamics

While the residential sales recorded a compound annual growth rate (CAGR) of approximately 26% over the past three years, demand was relatively flat in FY2025 due to high property prices and project launch delays. However, the outlook for the current and next fiscal years remains optimistic, with expectations of a rebound in demand supported by declining home loan interest rates and a moderation in price growth.

Shifts in Housing Segments

The report highlights a notable shift towards premium and luxury housing, which has seen its share of total launches in major cities increase significantly. In contrast, the affordable and mid-income housing segments are projected to remain subdued, reflecting the ongoing challenges posed by rising land and construction costs.