Housing Sales to Rise 1-4% in FY26: ICRA

New Delhi, Apr 7 (PTI) Rating agency ICRA on Monday said housing sales volume is likely to rise by a modest 1-4 per cent this fiscal, while new supply may grow 6-9 per cent across seven major cities.

In a statement, ICRA said the average selling prices might appreciate by 3-5 per cent.

On new supply, the rating agency projected that the new project launches in the top seven cities would grow by 6-9 per cent in 2025-26 fiscal to around 620-640 million square feet.

"The launches are estimated to have sharply declined by 14-17 per cent in 2024-25 due to approval-related challenges, after reporting the highest ever at 701 million square feet in 2023-24," the rating agency said, citing its research as well as PropEquity data.

Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings at ICRA, pointed out that the area sold might have declined 4-7 per cent in the 2024-25 fiscal to 650-670 million square feet due to lower launches.

"ICRA expects the area sold in the top seven cities in India to grow by 1-4 per cent in FY26," Reddy added.

The rating agency has maintained a stable outlook on the residential real estate sector.

"Given the consolidation in favour of larger and established players in the sector, the performance of these players is anticipated to outperform the broader underlying industry trends," it added.

ICRA said the average selling prices for the top seven cities witnessed sustained material hike, 11 per cent each in FY23 and FY24 and is further estimated to have grown by 13-15 per cent in FY25, driven by an increasing share of luxury segment sales along with pricing flexibility for developers, driven by comfortable YTS.

"ICRA expects the average selling prices to increase by 3-5 per cent in FY26," the statement added.