Anuj Puri, Chairman – ANAROCK Group
The RBI’s Monetary Policy Committee (MPC) decision to keep the repo rate unchanged is a key anchor for the Indian residential real estate market. The sector is witnessing strong annual growth amid short-term geopolitical shocks, and this rate pause reflects rising consumer pressures and volatile construction environments.
External vulnerabilities have tested the broader macroeconomic environment in early 2026. The ongoing war in the Middle East is having direct economic effects, including higher global oil prices and higher domestic construction costs. This sort of supply-side inflation is putting pressure on developers.
Also, rising geopolitical uncertainty has led many potential Middle Eastern investors, who tend to put large amounts of money into Indian housing, to pause their buying. Constant borrowing costs mean that the market is not being punished by rising material costs and rising loan rates.
According to ANAROCK Research, residential sales declined 7% quarter-on-quarter (Q-o-Q) with approx. 1,01,675 units sold in Q1 2026 vis-à-vis 1,08,970 units in Q4 2025. Total value of sales fell 5% q-o-q to INR 1.51 Lakh Crore. On the other hand, demand is still strong Y-o-Y. Sales volume and sales value in Q1 2026 grew by 9% and 6% respectively over Q1 2025 that saw sales of 93,280 units worth INR 1.42 Lakh Crore.
New project launches are now outpacing sales velocity, reversing post-pandemic trends. Total new supply increased sequentially by 2% and was up 26% YoY, meaning more than 1,26,265 units were newly launched in Q1 2026. Therefore, the unsold inventory available rose by 4% QoQ and 7% YoY to go beyond 6.01 lakh units by the end of Q1 2026. To absorb this growing inventory, a stable and affordable financing environment is needed.
The MPC’s policy consistency is a stabilising buffer. Input costs are rising and need to be managed carefully, but domestic consumer demand is fundamentally resilient. The Central Bank’s efforts to stabilize the Indian rupee will help boost import of fixtures and fittings in the luxury segment, which currently accounts for 20% of the housing supply as of Q1 2026.
Overall, this rate pause has shielded home loan structures, enabling the sector to absorb inventory gains and keep growth story going through 2026.
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