Want to Buy A Home in an Indian Metro? Better Be Super Rich

Homes that once were affordable are now very expensive. The ones that are still affordable are not worth living in.

Homes that once were affordable are now extremely expensive. And the ones that are still affordable are not worth living in.

(Photo: Kamran Akhter/The Quint)

India’s middle class can no longer buy homes in any of our big cities. Such a dream has gone way beyond their reach. That’s because housing prices have shot up exponentially since 2021, while incomes just haven’t kept pace.

In the past four years, average home prices have risen by 45-60 percent, whereas middle class salaries have grown at best by 20-30 percent. In many cases, like the IT sector, for instance, salaries have been almost stagnant. Or gone up by just 5 to 10 percent.

A Dream Lost for the Middle Class?

Thus, each year, more and more middle class families are giving up on their dream of owning a home. The proportion of middle class professionals who had earlier planned to buy a home, and have now decided to either delay it, or just switch to renting, is staggeringly high.

According to a recent survey report by the international property consultant Anarock, only 21 percent or one out of five Indians who had planned to buy a house will continue with their plan.

Another 18 percent, again roughly one in five, have either postponed their plan indefinitely or simply cancelled it.

Around 32 percent have delayed their decisions slightly, while the remaining 29 percent say they have postponed it by one to two years.

Skyrocketing House Prices

The biggest reason for this is the startling rise in housing prices. Anarock Research & Advisory reports that just in the past two years, average home prices in the top seven cities in India have risen by nearly 50 percent.

In the second quarter of 2023, a 1,000 square foot house would have cost Rs 60 lakh on an average. In the second quarter of 2025 that has risen to nearly Rs 90 lakh.

In fact, the Anarock survey shows that 81 percent of prospective home buyers consider the rise in prices a matter of concern. Meanwhile, 47 percent of those surveyed, or nearly half, say they are very concerned about rising home prices.

Homes that once were affordable are now extremely expensive. And the ones that are still affordable are not worth living in.

Or they are far away from schools and hospitals, and office areas. That is why, more than one-third of the prospective home buyers surveyed have dropped their plans of buying and switched to renting a house instead.

The only people who can afford to buy homes are the very affluent and the super rich. That is why, luxury and ultra luxury home sales have shot up while there’s been a drop in the sales of affordable homes.

For instance, in the Delhi-NCR region, the two luxury categories—luxury homes which cost between one and a half to two and a half crore and ultra luxury homes, which cost more than two and a half crore.

Together, these two categories accounted for about 10-13 percent of total home sales in 2021.

In the first half of 2025, their share has risen to 37-40 percent. While the share of affordable homes has fallen from 35-38 percent in 2021 to just 18-20 percent. Mid-end homes, priced between Rs 40 and 80 lakh, and premium homes priced between Rs 80 lakhs to Rs 1.5 crore have also seen a drop in their share. In 2021, such homes accounted for roughly 48-50 percent of total sales.

Now, that has dropped 40-44 percent, depending on the city. Of course, one reason for this is that the rise in house prices has shifted all homes up and moved some into the next bracket.

Only the Rich Interested in Buying Homes

But, a bigger reason is that only the rich are buying houses right now. Not just to live in but also as an investment.

Anarock’s data shows that in the eight quarters, beginning January 2021 till the end of 2022, about 30 percent of home buyers were purchasing as an investment. In the past eight quarters, between the mid-2023 and the middle of 2025, that percentage has risen to more than 35 percent.

Because of this, property developers have been concentrating on building homes for the rich. The result is a massive oversupply of luxury and ultra luxury homes across India.

In Delhi-NCR, for instance, there is an inventory overhang of 19 months. Which means it will take more than one and a half years to sell the houses that have already been built.

Mumbai Metropolitan Region is slightly better with an inventory overhang of 16 months. Hyderabad has an inventory overhang of 26 months.

That means it will take more than two years to clear the stock of unsold homes.

Will this lead to a property price correction, making homes more affordable for the middle class?

That, as they say, is the million dollar question.

And it is especially apt, considering a good house in India, nowadays, can cost a million dollars.

Watch the full video for more.

(The author was Senior Managing Editor, NDTV India & NDTV Profit. He tweets @Aunindyo2023.)