India's urban housing market faces structural affordability crisis in 2025

In Bengaluru, 20 per cent of buyers are now priced out of sub-Rs 1 crore homes, compared to 14 per cent in 2024, despite 13 per cent year-on-year demand growth

India’s urban housing market is facing a structural affordability crisis in 2025 as new supply priced below Rs 1 crore has contracted across all metros, according to a report by NoBroker, a proptech platform.

 

The report highlighted that buyers looking for affordable housing are being pushed into mid-end and high-end housing segments as affordability pressures have intensified year-on-year (YoY), with new launches increasingly skewed towards luxury segments. At the same time, demand for entry-level and mid-segment housing grew sharply.

 

In Bengaluru, 42 per cent of buyers are now priced out of sub-Rs 1 crore homes, despite 13 per cent year-on-year demand growth. Mumbai reported 39 per cent buyers being priced out, Pune 42 per cent, Hyderabad 84 per cent, Chennai 24 per cent, Noida 62 per cent and Gurgaon a staggering 79 per cent.

   

According to the report, this shift is not cyclical — it reflects rising land costs and a deliberate developer shift towards higher-margin products.

 

“As we step into 2026, while prices remain elevated, the pace of growth is beginning to moderate, and we expect the coming year to see more muted price increases compared to the sharp run-up of recent years. This transition is important because it follows a phase that has already pushed affordability to its limits. Even with the expected moderation ahead, the reality today is that a large section of homebuyers already feels priced out of the market,” Saurabh Garg, co-founder and chief business officer, NoBroker.com, noted.

 

Meanwhile, large townships and mega-projects are becoming the dominant development model as city infrastructure struggles to keep pace. In Bengaluru, projects with more than 500 units rose from 9 per cent to 17 per cent in 2025, with similar expansion in Navi Mumbai and Hyderabad’s ORR corridors. These projects offer developers flexibility through phased supply.

 

On the other hand, the report noted that developers are responding to the shifting dynamics through “shrinkflation”. Average unit sizes have reduced across cities — Bengaluru by 8 per cent year-on-year, Pune and Chennai by 5 per cent, the Mumbai metropolitan region and Hyderabad by 4 per cent, and the National Capital Region by 3 per cent. Buyers are paying higher ticket sizes for smaller homes, making layout efficiency and amenities more critical than ever.

 

“Many aspiring homeowners are no longer asking whether prices will rise, but whether they can realistically enter the market at all,” Garg noted.