Indian real estate faces mixed sales and rising geopolitical cost pressures

The Indian real estate sector is facing a complex landscape characterized by mixed sales performance and geopolitical cost pressures. According to PropTiger, residential sales across eight major Indian cities fell 6.1 per cent year-on-year to 91,729 units in Q2 2026. This decline was driven by seasonal weakness, economic uncertainty, and concerns regarding technology-sector job stability, particularly in markets like Pune and Bengaluru.

Despite the slowdown in sales volumes, property prices have remained steady, with the average sales-weighted price rising 1 per cent quarter-on-quarter to Rs 10,153 per sq ft. While cities like Hyderabad and Chennai saw sales growth, others like Ahmedabad and Delhi-NCR experienced contractions.

CareEdge Ratings notes that the sector remains resilient despite the West Asia crisis, reaching a value of $3.5 to $4.0 billion in H1 2026. However, the crisis has introduced cost inflation due to rising Brent crude prices, which have climbed from approximately $72/barrel to nearly $117/barrel. This surge in energy costs threatens to increase construction and transportation expenses by 2-3%, potentially compressing margins for developers, especially those in the early stages of project execution.