New realty launches to rise 6-9% to 620-640 million square feet in FY26, ICRA

New real estate launches across India's top seven cities are projected to increase by 6–9% to 620–640 million square feet (sq ft) in FY26 after witnessing a decline in FY25 due to project approval delays. In FY24, launches had touched a record high of 701 million sq ft. As per ICRA, despite affordability concerns caused by a 17–21% rise in average selling prices between FY23 and FY25, the sector remains supported by healthy demand, low unsold inventory, and strong replacement ratios. The replacement ratio, measured as new launches over area sold, stood at 1x during Q3 FY25 and is expected to remain steady soon. 

As we advance, affordability will likely improve, supported by expectations of a 25 basis point repo rate cut in February 2025 and another 50 basis point cut in FY26. This, coupled with reduced income-tax outflows, will likely improve consumer sentiment. Although the area sold is expected to decline by 4–7% in FY25 to approximately 650–670 million sq ft, ICRA anticipates a recovery in FY26 as the economic environment becomes more favourable. The sector’s medium-term outlook remains stable, backed by robust demand dynamics and a pipeline of new launches aligned with evolving consumer preferences. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.