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Housing

India's Housing Ladder Loses Crucial First Rungs as Affordable Housing Supply Shrinks

Strategic Insights

— 2 min read

India is facing a severe housing shortage, with developers increasingly turning away from affordable housing projects. According to a recent warning by Ashwinder R. Singh, Vice-Chairman & CEO of BCD Group and Chairman of the CII Real Estate Committee, nearly half of the homes sold in India's top eight cities in the first half of 2025 were priced above Rs. 1 crore. Meanwhile, affordable housing launches in 15 Tier-2 cities plummeted 67% year-on-year in Q1 2025.

Key Takeaways:

  • The trend of developers moving away from sub-Rs. 50-lakh homes is driven by tighter margins, heavier regulatory burdens, and stigma surrounding budget housing.
  • Nearly half of the homes sold in India's top eight cities in the first half of 2025 were priced above Rs. 1 crore.
  • Affordable housing launches in 15 Tier-2 cities plummeted 67% year-on-year in Q1 2025, based on PropEquity data.
  • Even in seven major metros, sales of units priced below Rs. 50 lakh declined by 14% in 2024, despite record overall residential sales.
  • The "triple penalty" discourages developers from building affordable homes: compressed margins, high input costs, and brand value dilution.
  • Compliance remains disproportionately burdensome, with budget projects facing the same regulatory hurdles as high-end developments.
  • 73% of incremental urban housing demand sits below the Rs. 50-lakh mark, predominantly driven by millennial families looking for shorter commutes.
  • Nearly a quarter of all mortgage disbursements in the past year were for affordable housing.

Statistics:

  • 47% of new launches in 2023 were homes priced under Rs. 50 lakh (Times of India analysis of 2024 data)
  • 63% of new launches in 2019 were homes priced under Rs. 50 lakh (Times of India analysis of 2019 data)
  • 67% year-on-year decline in affordable housing launches in 15 Tier-2 cities in Q1 2025 (PropEquity data)
  • 14% decline in sales of units priced below Rs. 50 lakh in seven major metros in 2024 (data from record overall residential sales)
  • 73% of incremental urban housing demand sits below the Rs. 50-lakh mark (blended estimate by CII-NAREDCO)
  • 25% of mortgage disbursements in the past year were for affordable housing (EY data)

Sources:

  • Singh, Ashwinder R. "India's Housing Ladder Loses Crucial First Rungs as Affordable Housing Supply Shrinks." Newsvoir, July 30.
  • Times of India. "Affordable Housing: Share of Homes Priced Under Rs. 50 Lakh Falls Sharply." 2024.
  • PropEquity. "Q1 2025 Real Estate Market Report." 2025.
  • CII-NAREDCO. "Blended Estimate of Incremental Urban Housing Demand." 2025.
  • EY. "Affordable Housing: The Next Growth Driver?" 2024.
  • Ministry of Housing. "Data on Affordable Housing." 2024.

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