Key Takeaways:

• Developers and property platforms raised ₹17,867 crore across 11 capital-market deals in the first nine months of FY26, matching FY25 deal count.
• Since FY18 the sector has raised ₹72,331 crore, led by REITs with ₹31,241 crore, followed by large-cap, mid-cap and small-cap firms.
• Housing affordability has improved markedly; the price-to-income ratio fell from 22 in 1995 to 3.3 in 2024, supporting sustained demand.
• Top seven cities saw strong sales in 2024 and pan-India residential absorption has matched or outpaced supply, helping developers maintain price discipline.

India’s Realty Sector Raises ₹17,867 Crore in FY26 Nine Months as Affordability Improves

India’s real estate market has returned to the capital markets with renewed vigour, signalling more than a short-term rebound. In the first nine months of fiscal 2026, developers and property platforms raised ₹17,867 crore across 11 capital-market transactions, already matching the full-year deal count for FY25, according to analysis by Euirus Capital.

India real estate sector posts robust capital market activity

The deal momentum suggests the sector may record its highest fundraising in six years if current trends continue. Since FY18 the real estate industry has attracted ₹72,331 crore in capital. Real estate investment trusts accounted for the largest share at ₹31,241 crore, followed by large-cap real estate companies with ₹20,437 crore, mid-cap firms at ₹12,496 crore and small-cap companies at ₹8,156 crore.

Market participants attribute the renewed investor appetite to a mix of steady fundamentals and improving affordability. Home loan rates and rental yields have remained relatively stable since the COVID period in FY21, easing financial pressure on buyers. Analysts project the gap between home loan rates and rental yields to narrow to below 500 basis points in FY26, a development that should further support housing demand.

Affordability has been a long-term driver of the recovery. The property price to annual income ratio, which stood at about 22 in 1995, has fallen steadily over three decades to approximately 3.3 in 2024. This improvement reflects rising incomes, urban development and a shift in buyer preferences towards upgraded housing.

These factors combined to make residential real estate a preferred asset class in the first half of 2025. The top seven cities recorded strong sales in calendar year 2024, sustained by an active pipeline of launches. Importantly, launches have remained in balance with absorption. That equilibrium has helped developers preserve pricing discipline while avoiding an inventory overhang, which reassures both equity investors and lenders.

Pan-India residential absorption has equalled or exceeded supply in recent years, signalling higher sales or lower inventories in many markets. Developers reported increased take-up in key urban centres, and the steady pace of launches has supported continued buyer interest. This supply-demand balance is central to maintaining healthy cash flows and enabling further access to capital markets.

Market observers say that REIT activity has been particularly influential. The large share of funds channelled through REITs has broadened investor participation and provided long-term financing for completed and income-generating assets. Large-cap developers have similarly benefited from improved market sentiment, while mid-cap and smaller players are gradually accessing growth capital.

Looking ahead, analysts expect the upcycle to continue in the near term, provided macroeconomic conditions remain stable. Lower borrowing cost volatility, improving household incomes and targeted product launches that match evolving buyer needs should sustain demand. For investors, the combination of stable yields and clearer exit routes through public markets makes the sector more attractive than in recent years.

For now, the capital markets data underline a recovering sector that is attracting diverse sources of capital and benefiting from improved affordability. If fundraising and deal activity persist through the remainder of FY26, the year could mark a notable milestone for India’s real estate industry.