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India's Residential Real Estate Faces Significant Challenges Amid Rising Costs and Delays
Realty sector in for a rude reality check, say experts
Image: Hindustan Times
India's residential real estate market is experiencing structural stress, with only 55% of marketable housing supply under construction as of March 2026, down from 75% in 2017. Rising construction costs and execution delays are exacerbating the situation, leading experts to warn of potential downturns in the sector.
- 01As of March 2026, only 55% of India's marketable housing supply was under construction, a significant drop from 75% in March 2017.
- 02Total marketable supply increased by 11% from 2017 to 2026, but active construction volume fell by nearly 500 million square feet.
- 03Construction costs are projected to rise between 3% and 5% in 2026 due to labour shortages and supply chain disruptions.
- 04Developers facing financial strain may struggle if sales momentum slows, particularly those with high debt levels and unrealistic financial projections.
- 05The ongoing West Asia conflict is impacting raw material supply chains, further complicating project execution.
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India's residential real estate sector is showing signs of significant stress, with only 55% of marketable housing supply under construction as of March 2026, a sharp decline from 75% in March 2017. This decline is attributed to execution delays and rising costs, with total marketable supply increasing by 11% while active construction volume dropped by nearly 500 million square feet. Experts highlight that rising construction costs, expected to increase by 3% to 5% in 2026, are driven by labour shortages and supply chain issues exacerbated by the ongoing West Asia conflict. Developers with high debt or unrealistic financial expectations are particularly vulnerable, as a slowdown in sales could lead to layoffs and further reductions in construction activity. Industry leaders emphasize the need for careful navigation of execution and inventory risks to avoid a potential downturn in the market.
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The slowdown in construction and rising costs could lead to job losses in the real estate sector and affect homebuyers facing higher prices.
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