India's housing affordability likely to stabilise this year: Report

Household income growth likely to outpace property price appreciation in six major cities, says CBRE

The affordability of homes in six major cities will likely stabilise between 2026 and 2028 on the back of rising household incomes and favourable policies, said a report by real estate consultancy firm CBRE on Thursday.

 

The report noted that for the first time since 2021, household income growth is anticipated to outpace property price appreciation, easing the burden on homebuyers. This growth is likely to align with the country's transition to upper-middle-income status by 2030 and policy momentum amid geopolitical uncertainties, the report noted.

 

The company’s Housing Affordability Index tracked the equated monthly instalment (EMI)-to-household income ratio in Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai and Pune — and across income brackets of Rs 40 lakh, Rs 75 lakh and Rs 1 crore annually.

   

“India's housing market is at a structural inflexion point. The convergence of monetary easing, moderating price appreciation, and rising household disposable incomes is expected to cushion home-buying conditions across cities and income segments. The sector could witness a divergence in sales value-over-volume dynamics in 2026,” said Anshuman Magazine, chairperson and chief executive officer, India, South-East Asia, MEA, of CBRE.

 

Between 2021 and 2024, the share of income people across all income groups spent on home loan EMIs increased due to the Reserve Bank of India raising interest rates and property prices.

 

However, from 2026 onwards, the EMI-to-income ratio is expected to stabilise, indicating improved and steady affordability across cities and income groups.

 

CBRE said the residential sector recorded more than 270,000 new launches and sales each in 2025. While sales volumes declined by around 8 per cent, value rose by about 15 per cent, reflecting a shift towards higher-value housing.

 

The premium and luxury segment accounted for around 27 per cent of total sales, with growth of over 30 per cent year-on-year. Supply also expanded significantly, with around 52,000 luxury units launched in 2025.

 

The report noted that the sub-Rs 45 lakh affordable housing segment remains constrained due to rising input costs and the withdrawal of targeted fiscal incentives.

 

CBRE recommended that policy recalibration — including revisiting price and area ceilings and restoring incentives developers and homebuyers — could help revive the segment’s market share and add around 60,000 units annually.

 

“The (affordable housing) market is anchored by a resilient growth baseline and disciplined supply-demand parity. The anticipated stabilisation in affordability over the next three years will be a vital catalyst in sustaining this momentum and informing strategic capital objectives across the ecosystem,” said Gaurav Kumar, managing director and co-head, capital markets and residential services, India, CBRE.