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India's affordable housing supply has dropped by 36% in two years, from 3,10,216 units in 2022 to 1,98,926 in 2024, as per PropEquity. The top nine cities, including NCR, Mumbai, and Hyderabad, face significant shortages as developers shift towards luxury housing. NCR saw just 2,672 affordable units in 2024, while Hyderabad recorded a 69% drop, with only 13,238 units. In contrast, luxury housing supply rose by 48%. Experts estimate a need for 1.5 crore homes in tier-1 cities over five years and urge government incentives like tax cuts for developers and home loan rebates for buyers to address the crisis.
India is facing a significant affordable housing crisis as supply of homes priced INR 1 crore and below has dropped by 36% in the last two years. According to a report by PropEquity, this category's supply in the top nine cities of India has decreased from 3,10,216 units in 2022 to 1,98,926 units in 2024, with NCR, Mumbai, and Hyderabad experiencing the largest declines. This decline is mainly due to developers shifting their focus towards luxury housing, leaving a significant gap in the market for affordable homes. Advertisement
In 2024, the National Capital Region (NCR) saw just 2,672 units in the affordable and mid-income category, which represents a mere 6% of the total housing supply of 45,503 units in the region. Similarly, Mumbai saw only 6,062 units in this category, making up 15% of the total supply of 40,963 units. Hyderabad recorded the steepest drop of 69%, with just 13,238 units in the affordable category in 2024, down from 42,747 units in 2022.
Samir Jasuja, Founder and CEO, PropEquity said, "Today, 8% of India's population live in tier 1 cities and this number is expected to grow exponentially in the next five years as more people move to these cities for employment opportunities. The lack of supply in this category, if not attended to in time by the Government, will lead to a housing crisis akin to Australia and Canada."
"In view of rising migration and growing number of nuclear families, it is estimated that 1.5 cr homes would be required in these cities in the next five years.
"To address this problem, the Government must not just incentivise developers through tax cuts and subsidies in order to make affordable and mid-income housing a viable option but also provide benefits to homebuyers in the form of home loan rebates, stamp duty cuts etc."
The overall supply of affordable and mid-income homes in India's top nine cities dropped by 30% in just one year, from 2,83,323 units in 2023 to 1,98,926 units in 2024, and by 36% in two years. The cities analyzed in the report include Bengaluru, Chennai, Hyderabad, Mumbai, Pune, Thane, Navi Mumbai, Kolkata, and NCR.
The supply of affordable homes priced below INR 1 crore in India's top nine cities has seen significant changes over the past two years. In Bengaluru, housing supply in 2024 stood at 25,012 units, a 33% drop from 37,252 units in 2022. In the last year alone, the city saw an 11% decline. Chennai, with 12,743 units in 2024, experienced a 13% decrease over the two-year period, and an 8% decline in just the last year. Hyderabad faced the most substantial drop, with a 69% decrease in affordable housing supply, falling from 42,747 units in 2022 to only 13,238 units in 2024. The city saw a 58% drop in supply in just one year.
Kolkata saw an unusual trend, with the supply falling by 41% in one year but showing a 7% increase over the two-year period, reaching 10,785 units in 2024. In Mumbai, the supply dropped by 60%, from 15,042 units in 2022 to 6,062 units in 2024, marking a 31% decrease in the last year alone. Navi Mumbai, with 21,290 units in 2024, saw a modest 6% drop over two years and a 10% decrease in the last year. Thane, which had the highest supply of affordable homes among the cities, saw 57,029 units in 2024, but still faced a 36% drop in supply over two years and a 28% drop in just one year.
Pune reported 50,095 units in 2024, a 32% decline over two years and a 33% drop in the last year. NCR had the least supply of affordable homes among the top cities, with just 2,672 units in 2024. This marked a 45% decrease over the past two years and a 43% decline in the last year.
In stark contrast, the supply of luxury homes (priced above INR 1 crore) has increased by 48% in the last two years across the top nine cities. Bengaluru recorded a 187% increase in luxury housing supply, while other cities like Chennai (127%), Kolkata (58%), Navi Mumbai (70%), Thane (53%), Pune (52%), and NCR (192%) also saw significant rises in high-end housing. However, Mumbai and Hyderabad faced a decline in luxury housing, with a drop of 11% and 14%, respectively.
This shift towards luxury housing is exacerbating the affordable housing shortage. With rising migration and the growing number of nuclear families, it is estimated that 1.5 crore homes will be required in these cities over the next five years. PropEquity's founder and CEO, Samir Jasuja, warned that if the government does not address this issue, India could face a housing crisis similar to those seen in countries like Australia and Canada.
To mitigate the housing shortage, Jasuja suggests that the government should incentivize developers through tax cuts and subsidies to make affordable and mid-income housing viable. Additionally, homebuyers should be given benefits such as home loan rebates and stamp duty cuts to encourage investment in affordable homes.
As migration continues to rise, particularly to tier-1 cities, the lack of affordable housing could lead to a major crisis. Urgent intervention is needed to ensure that the growing population is not left without adequate housing options.
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