India's mid-income and luxury housing segments drive real estate growth in Q4 FY26

India's residential real estate market closed fiscal year 2026 on a broadly positive note, with mid-income and luxury housing segments emerging as the primary growth engines, even as affordable housing continued to face mounting pressure, according to a report by Elara Capital.The mid-income segment, covering homes priced between Rs 10 million and Rs 30 million, posted an 8 % rise in sales volumes quarter-on-quarter and a 16 % jump year-on-year. The luxury segment, comprising homes priced above Rs 30 million, was not far behind, registering 12 % quarterly growth and 9 % annual growth in volume terms.Affordable housing, however, told a starkly different story. With average ticket sizes below Rs 10 million, the segment saw sales fall 7 % quarter-on-quarter and a steep 21 % year-on-year, reflecting persistent demand headwinds at the lower end of the market.At the city level, Tier-I markets recorded a modest 4 % quarterly uptick in housing absorption, though annual growth remained virtually flat at 1 %, underscoring the outsized role played by mid-income and luxury buyers in sustaining overall volumes.Bengaluru shines, Gurugram stumblesAmong major markets, Bengaluru and Kolkata stood apart, both delivering double-digit growth of 11 to 23 % across quarterly and annual metrics.

Bengaluru also led on new launch momentum, with its take rate climbing 12% quarter-on-quarter and ending 8 percentage points above its eight-quarter trailing average.In contrast, reduced speculative activity in the National Capital Region (NCR) pulled down the aggregate take rate. Gurugram experienced a sharp decline, with its individual take rate dropping by approximately 20 percentage points, contributing to a broader 600 basis point drop across NCR compared to the eight-quarter average."Inventory overhang across markets was broadly stable QoQ but Gurugram saw an uptick of three months where we believe demand momentum is currently strong only for projects that have a pull factor vs push " the report said.It also detailed a wider annual divergence between individual regional luxury micro-markets during the fiscal year. "Gurugram was an outlier, which saw a 15% YoY drop in luxury sales volume - the share of luxury in both overall supply and absorption declined 16ppt YoY and 2ppt YoY, respectively.

Bengaluru witnessed the highest increase in luxury sales volume, up 55% YoY, accounting for ~30% of luxury sales volume growth in FY26.

"Listed developers pull ahead of the packOrganised and listed developers continued to consolidate their market position through the year. Large developers collectively gained up to 200 basis points in market share by absorption volume and value in FY26. Listed firms widened the gap further, with new launch take rates exceeding the industry average by 15 percentage points in Tier-I cities.Pre-sales for listed developers surged 21 % year-on-year, significantly outpacing the broader industry's value growth of 8 %. Collections grew 18 % year-on-year, signalling strong project execution. Inventory overhang for listed players stood at 13 months, compared to 19 months for their unlisted counterparts.Commercial and retail segments show mixed signalsOn the commercial side, office leasing maintained a healthy quarterly run-rate above 20 million square feet in gross terms. However, net absorption declined 26 % year-on-year and 27 % quarter-on-quarter, pointing to some softening in effective demand.The retail segment saw vacancy rates improve across most key markets, though Chennai bucked the trend with a 0.5 percentage point quarterly rise, and NCR saw vacancy edge up 1 percentage point quarter-on-quarter.