Last Updated on June 16, 2026 5:04 pm by BIZNAMA NEWS
R. Suryamurthy
For millions of Indians, the dream of owning a home is increasingly becoming a more expensive aspiration. A new study by Magicbricks Research suggests that India’s residential property market has undergone a dramatic shift over the past four years, with affordable housing steadily disappearing from new project launches while premium homes have become the industry’s new growth engine.
The data paints a stark picture. Homes priced below ₹75 lakh, once the backbone of India’s residential market, accounted for just 17% of new housing supply in the first quarter of 2026, down sharply from 47% in late 2021. At the same time, homes priced between ₹1.5 crore and ₹3 crore have emerged as the largest category of new launches, commanding 31% of total supply.
The numbers suggest that India’s “dream home” has effectively moved up a bracket — from a sub-₹50 lakh apartment a decade ago to a property worth more than ₹1 crore today.
While the rapid premiumisation of the market has been evident since the pandemic, the latest report indicates that the shift may now be reaching a plateau. Developers are no longer moving aggressively into higher price segments; instead, the market appears to be settling into a new normal dominated by mid-premium and premium housing.
For affordable housing, however, the trend raises uncomfortable questions.
The decline in lower-priced homes comes despite India continuing to face a significant urban housing shortage, particularly among lower- and middle-income households. Industry experts say developers are finding it increasingly difficult to make projects viable at affordable price points.
Land costs have surged across major cities, construction materials remain expensive, and regulatory compliance requirements have increased project costs. Together, these factors have squeezed developer margins, making affordable housing projects less attractive compared with premium developments.
“Development economics simply work better in higher ticket-size projects,” the report noted, highlighting how rising input costs have constrained fresh launches in the sub-₹75 lakh category.
The challenge is particularly significant because affordable housing has historically served as the entry point for first-time homebuyers. As supply shrinks, many prospective buyers are either postponing purchases or moving farther away from city centers in search of lower prices.
The transformation is visible across major metropolitan markets.
In the National Capital Region, developers who aggressively expanded into luxury housing after the pandemic are now increasingly concentrating on projects priced between ₹1 crore and ₹3 crore. Mumbai Metropolitan Region continues to witness selective luxury expansion, while Bengaluru’s residential market remains firmly anchored in premium and upper-mid-segment demand, supported by a strong technology workforce.
Hyderabad, meanwhile, continues to grow rapidly but exhibits greater fluctuations in supply trends than its peers.
Interestingly, the market’s luxury segment appears to have reached a point of relative stability. Homes priced above ₹5 crore now account for around 9% of new launches, compared with just 2.5% four years ago. Yet their share has remained largely unchanged in recent quarters, suggesting that the frenzy surrounding ultra-premium housing may be moderating.
The most resilient category has been the ₹75 lakh-₹1.5 crore segment, which has consistently contributed about 31% of national housing supply. This segment has acted as a buffer between shrinking affordability and expanding luxury, helping maintain balance in the broader market.
For policymakers, however, the shrinking affordable housing segment remains a concern.
Government initiatives over the past decade helped stimulate demand among lower-income buyers through subsidies and incentives. But as property prices rise and project costs increase, many analysts believe fresh policy interventions may be needed to revive affordable housing supply.
Without such support, the gap between housing demand and available inventory could widen further, particularly in fast-growing urban centers where homeownership remains out of reach for a large share of residents.
The Magicbricks report argues that India’s housing market is entering a more mature phase characterized by greater pricing discipline and better alignment between launches and demand. Yet beneath that stability lies a fundamental reality: the market is building fewer homes for those who need affordability the most.
As developers increasingly cater to buyers with deeper pockets, the question confronting India’s real estate sector is no longer whether premium housing will continue to grow. It is whether affordable housing can remain part of the country’s urban growth story at all.