THE ₹1 CRORE HOME NOBODY CAN AFFORD?

 

BIZ MASALA  |  SUNDAY SPECIALS

        THE ₹1 CRORE HOME NOBODY CAN AFFORD?

India’s housing paradox: homes are getting more expensive, but who is actually buying them?

By Murthy ASR  |  Biz Masala

An imagined urban household looking across two housing markets: older, dense neighbourhoods and capital-intensive towers. Original hero image created for this feature.

THE HOUSING BOOM HAS A DISTRIBUTION PROBLEM

India’s housing market can be booming in value while becoming harder to enter for first-time buyers. That is not a contradiction. A market can sell fewer homes overall, sell a greater share of expensive homes, and still report higher total sales value. The key question is not simply whether property prices are rising. It is who can afford the product developers increasingly choose to build.

A Reuters poll of property analysts published in March 2026 reported that homes priced above ₹1 crore accounted for 63% of total residential sales in 2025, up from 53% in 2024, even as overall transactions fell 11%. The same report said affordable-home sales fell 31%, and analysts expected average prices to rise around 5% annually through 2028. These are reported market estimates and a poll forecast—not a universal description of every city or segment.

Sources use different price bands: the premium share is homes above ₹1 crore; the affordable-sales decline refers to homes below ₹50 lakh. These are not opposite slices of one pie.

THE AFFORDABLE SEGMENT IS UNDER PRESSURE

Knight Frank data reported by Moneycontrol in February 2026 showed sales of homes priced below ₹50 lakh fell 17% in 2025, while launches in that category fell 28%. Premium home sales moved in the opposite direction. The exact decline differs across reports because price thresholds, city coverage and data providers differ. The consistent signal is a shift in market activity toward higher-priced homes.

Developers face a commercial calculation. Land, approvals, construction finance, labour and materials all cost money; premium units can generate more revenue per transaction and may be easier to sell to buyers with stronger purchasing power. But if supply migrates upward in price, households with modest incomes may face fewer new-build options near employment centres. This is a market incentive, not proof of collusion or wrongdoing.

A ₹1 CRORE HOME IS NOT A ₹1 CRORE DECISION

The advertised price is only the entry point. Buyers also need a down payment, stamp duty and registration, furnishing, moving costs, maintenance and a buffer for income shocks. A large loan adds interest-rate and job-security risk. A household can qualify for a mortgage and still find the full cost of owning the home financially brittle.

Affordability depends on the full household balance sheet and access costs—not only the listing price or a bank’s loan approval.

WHAT DOES A 5% PRICE RISE MEAN?

To illustrate the compounding effect, a property-price index starting at 100 would reach about 115.8 after three years of 5% annual increases. This is a scenario based on the Reuters poll’s broad forecast, not a forecast for a particular property. If wages and household incomes rise faster, affordability can stabilise; if they lag, the same property moves further out of reach.

Illustrative arithmetic: 100 × 1.05³ ≈ 115.8. The actual path will differ across cities, locations and home types.

AFFORDABILITY IS NOT ONE NATIONAL NUMBER

NITI Aayog’s December 2025 housing framework notes that city-level household-income data are often unavailable and that a single uniform definition of affordability can be misleading across India’s diverse conditions. It uses a working definition for policy analysis based on unit size and price thresholds, broadly consistent with prevailing rules, while acknowledging limitations. A ₹45 lakh flat may be outside reach for one household, manageable for another and unavailable near the workplace for a third.

Price-to-income ratios can help compare cities, but they need careful handling. Median listing prices may not represent the stock households actually buy; household income data may omit informal earnings; and city averages can hide large differences between neighbourhoods. Informal settlements, self-built homes and rental arrangements are also poorly represented in some formal-market datasets.

THE RENTAL ESCAPE ROUTE IS NOT FREE

Renting can be rational when households need mobility, lack a down payment or face uncertain employment. But rent is not automatically affordable, especially where jobs concentrate in expensive urban cores. A Reuters housing poll in March 2026 also reported expectations of urban rents rising 6–8% over the following year. That is a forecast, not an observed outcome. For renters, the relevant calculation includes rent, deposits, commute time, transport costs and the ability to save for future housing.

WHY BUILDERS MAY CHOOSE PREMIUM

Driver	Why it matters commercially	Public-interest question
Land and location	Well-located land is scarce and costly	Can lower-cost homes be built near jobs and transit?
Revenue per unit	Higher ticket sizes can support project economics	Are incentives aligned to actual household need?
Buyer finance	Affluent buyers may have stronger down payments	What happens to first-time buyers with limited equity?
Approval and construction costs	Time and carrying costs raise break-even prices	Can predictable approvals reduce costs without weakening safeguards?
Infrastructure premium	Metro, roads and public investment can lift nearby values	How much public value is reflected in land and housing prices?

 

WHAT POLICY SHOULD MEASURE

A serious affordability dashboard would track more than launches and sales value. It would publish price-to-income and EMI-to-income measures by city and income band; supply of homes by price and size; access to jobs and public transport; rents and deposits; unsold inventory; completion delays; and the share of household income left for food, education, health and savings after housing costs.

Public support should also be judged by outcomes. How many homes were completed, occupied and affordable to the intended income group? Are they connected to jobs, schools and transport? Do maintenance and commuting costs erase the apparent price advantage? A low sticker price in a distant location can become an expensive life.

BIZ MASALA VIEW | A BOOM IS NOT THE SAME AS ACCESS

India’s housing market is not simply ‘broken’ and the data do not show that every home is unaffordable. The evidence points to a sharper problem: the composition of supply and sales is moving upmarket while the lower-priced segment has weakened in several reported datasets. Rising market value can therefore coexist with a shrinking route to ownership for ordinary households.

The policy test should be straightforward: can a household with a stable but non-elite income find a safe home of adequate size within a tolerable distance of work, without surrendering its ability to save and withstand a shock? If the answer is no, the market may be delivering valuable assets—but it is not delivering broad housing access.

REPORTING NOTE & METHODOLOGY

This is a desk-based analytical feature. Market figures are attributed to Reuters, Knight Frank data as reported by Moneycontrol, the National Housing Bank and NITI Aayog. Price-band definitions differ across reports and are stated in context. The index chart is an illustrative calculation using a 5% annual growth scenario. It is not a property valuation, investment recommendation or city-specific forecast.

SOURCES & FURTHER READING

1.       1. Reuters, 12 March 2026, “India’s luxury housing boom to lift home prices, squeezing affordability further.” https://www.reuters.com/world/india/indias-luxury-housing-boom-lift-home-prices-squeezing-affordability-further-2026-03-12/

2.       2. National Housing Bank, “Report on Trend & Progress of Housing in India 2025,” published 25 February 2026. https://www.nhb.org.in/publications/report-on-trend-and-progress-of-housing-in-india/

3.       3. NITI Aayog, “A Comprehensive Framework to Promote Affordable Housing,” December 2025. https://www.niti.gov.in/node/2086

4.       4. Moneycontrol, 17 February 2026, “Affordable housing demand weakens sharply in 2025; sales down by 17 percent” (reporting Knight Frank data). https://www.moneycontrol.com/news/business/real-estate/affordable-housing-demand-weakens-sharply-in-2025-sales-down-by-17-percent-13832368.html

5.       5. JLL India, 20 March 2026, “Premium housing grows despite volume correction in India.” https://www.jll.com/en-in/insights/premium-housing-grows-despite-volume-correction-in-india

6.       6. CBRE India, 26 March 2026, “Indian Housing Affordability Likely to Stabilise This Year…” — consultancy outlook, not an official statistic. https://www.cbre.co.in/press-releases/indian-housing-affordability

EDITORIAL CAVEAT

Housing-market figures vary with the data provider, covered cities, definition of affordability, and whether they measure primary sales, listings or registrations. A forecast is not an outcome. This article does not infer wrongdoing from premiumisation; it examines incentives, distributional effects and the public-policy questions that follow.

BIZ MASALA | THE BOTTOM LINE

— Murthy ASR

BIZ MASALA

Business. Economics. The forces behind the numbers.

Typographic brand signature at the end; the original Biz Masala logo asset was not available in this working session.