Real estate prices across India rose 6% year-on-year in the first quarter of FY27, with New Delhi, Noida, Chennai, Greater Noida and Bengaluru emerging as the key markets driving the increase, according to a Kotak Institutional Equities report.

The rise in prices helped offset subdued sales volumes, with residential sales value increasing 9% YoY during the quarter. Average realisation climbed to Rs 9,629 per sq ft, up 6% YoY but down 2% sequentially.

"Residential sales value grew 9% YoY 1QFY27, led by pricing growth of 6% YoY and volume growth of 3% YoY," the report stated, as quoted by ANI.

Residential sales across India stood at 247 million sq ft during the quarter, up 3% YoY but down 3% from the previous quarter. The performance came amid a sharp slowdown in new supply, with project launches falling 14% YoY and 16% QoQ to 242 million sq ft.

The National Capital Region was the biggest drag on volumes. Residential sales in the region fell 27% YoY and 8% sequentially to 23.5 million sq ft, while new launches dropped to 21.2 million sq ft.

Other major markets performed better. Sales in the Mumbai Metropolitan Region rose to 41.5 million sq ft, supported by launches of 33.8 million sq ft.

Bengaluru recorded sales of 30.7 million sq ft, while Hyderabad reported 34.3 million sq ft in sales, aided by 55.5 million sq ft of new launches.

The report said Bengaluru and Gurgaon had recorded stronger price CAGR across most projects over the past few years, contributing to higher overall realisation across major micro-markets.

"Average realization rose to Rs 9,629/sq. ft (+6% YoY, -2% QoQ), offsetting the impact of lower volumes and aiding 9% YoY increase in sales value," the report highlighted.

However, the report flagged that the industry's recent growth has been driven primarily by higher prices rather than a sustained increase in volumes.

"Notably, industry growth over the past two years has been driven largely by pricing appreciation," the report added. "A sustained recovery in volumes would provide stronger confirmation of underlying demand strength."

Unsold housing inventory also increased sequentially in Bengaluru, Hyderabad and the NCR, partly due to fresh project launches. Total unsold inventory across India stood at 1.8 billion sq ft as of June 2026, equivalent to around 1.9 years of trailing 12-month sales.

"Industry volumes have remained range-bound for three years in a row, even as larger developers continue to grow through a combination of geographical diversification and improving market share," it noted.