Residential sales in India’s top cities forecast at 3.55 lakh units in 2026; sector resilient to West Asia crisis

New Delhi, Aug 19 (IANS) India’s real estate sector is expected to remain resilient amid the West Asia crisis, with residential unit sales in the top six cities for CY2026 forecast to touch around 3.55 lakh units, a report said on Wednesday.

The report from CareEdge Ratings said sustained demand, deleveraged developer balance sheets and robust institutional participation helped the Indian Real Estate sector to touch $3.5 to $4 billion in H1 2026.

“Commercial assets continued to account for the largest share of capital, underpinned by sustained GCC expansion and strong office demand,” the ratings agency said.

The report highlighted that the impact of the West Asia turmoil has been uneven across segments as affordable housing and project execution face cost pressures, while office leasing and industrial or warehousing continue to compound on structural demand.

“The surge in Brent crude prices – from around $72/barrel before the conflict to nearly $117/barrel at its peak – triggered cost inflation across sectors, driven by higher fuel, freight, and input costs,” the ratings agency noted.

If the turmoil persists, the report warned, sustained higher crude could increase fuel, transportation and construction material costs and cause potential cost escalations of 2–3 per cent, compressing margins for projects in early stages.

Overall, the geopolitical uncertainty remains a near-term cost and caution risk rather than a broad demand disruption.

Large, organised developers are better placed to manage the pressure, while smaller, highly leveraged developers are more vulnerable. Over the longer term, urbanisation, infrastructure development, GCC expansion and manufacturing investment should continue to support sector growth.

“While the geopolitical situation in West Asia remains a key monitorable, the near-term impact on the Indian real estate sector is expected to remain limited. Healthy demand, resilient premium housing and stable leasing activity across commercial real estate should support the sector’s overall performance,” said Rajashree Murkute, Senior Director, CareEdge Ratings.

Gross absorption is estimated to be above 90 msf for Grade A office space in the top six cities for CY2026. However, prolonged uncertainty could delay corporate expansion plans and leasing decisions, particularly by multinational companies, leading to slower space absorption.

—IANS

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