Affordable housing sales witnessed a steep decline in the first quarter of 2026, with homes priced below Rs 50 lakh dropping 23% year-on-year to 16,273 units across eight major cities, according to a report by Knight Frank India. The fall was primarily attributed to fewer new launches in this segment, as builders cited rising input costs, particularly land prices, making it challenging to develop lower-priced homes. Additionally, since the COVID-19 pandemic, demand has been shifting toward more expensive properties.
City-Wise Decline and Segment Performance
The report highlighted that all eight cities—Mumbai, Delhi-NCR, Pune, Bengaluru, Hyderabad, Chennai, Ahmedabad, and Kolkata—recorded a decline in affordable housing sales during January to March. The slowdown extended to the Rs 50 lakh to Rs 1 crore segment, where sales dropped 12% to 23,567 units. Conversely, higher-priced homes performed better. Sales in the Rs 1–2 crore segment rose 10% to 24,657 units, while the Rs 2–5 crore category increased 17% to 16,075 units. The Rs 5–10 crore segment saw a slight dip of 3%, with 3,338 units sold.
Premium Segment Trends
In premium categories, homes priced between Rs 10–20 crore saw a 12% rise in sales to 738 units. The Rs 20–50 crore segment recorded a sharp 80% jump to 165 units. However, homes priced above Rs 50 crore saw sales fall 93% to just 12 units. Overall, housing sales across all price segments fell 4% to 84,827 units during the quarter.
Factors Affecting Demand
The report cited high property prices and uncertainty due to the West Asia conflict as factors affecting demand. Knight Frank noted, "Market activity remained skewed toward the higher end even as growth moderated, while volumes continue to slide in ticket sizes below Rs 10 million (1 crore)." The share of homes priced below Rs 1 crore dropped to 47% of total sales, compared to 54% in the same period last year.
Industry Insights
Shishir Baijal, International Partner, Chairman & Managing Director of Knight Frank India, commented, "While this phase can be partly attributed to a natural consolidation after strong growth, the continued rise in prices alongside softening volumes indicates growing pressure on affordability and absorption." He added that global uncertainties have also affected buyer interest. Meanwhile, new housing supply across the eight cities fell 2% to 94,855 units in the January–March period.
