India’s housing market is facing a significant crisis, particularly in the affordable and mid-income segments. A recent report from PropEquity, a leading real estate data analytics firm, highlights a drastic decline in housing supply across India’s top nine cities, which are key migration hubs for job seekers. The report reveals that in the last two years, the availability of homes priced at Rs 1 crore and below has plummeted by 36%, dropping from 3,10,216 units in 2022 to just 1,98,926 units in 2024. The cities most affected by this trend include the National Capital Region (NCR), Mumbai, and Hyderabad, which are experiencing the most severe shortages. Notably, the total supply of affordable housing in 2023 was 2,83,323 units, marking a 30% decline within just one year. This troubling trend raises concerns about housing accessibility, especially as more people flock to these urban centers seeking employment opportunities.
Severe Shortages in Major Urban Areas
The supply of affordable housing has faced unprecedented declines, with cities like Hyderabad and Mumbai registering the most alarming statistics. In Hyderabad, the availability of homes priced at Rs 1 crore and below has plummeted by a staggering 69%, falling to just 13,238 units. Similarly, Mumbai has seen a 60% reduction, resulting in only 6,062 affordable units available for aspiring homeowners. The NCR has also been significantly impacted, with a mere 2,672 units available in this price bracket, reflecting a 45% decrease over the two-year period. This trend suggests that developers are prioritizing luxury housing projects, leaving a growing gap in the market for affordable options. With the cost of living on the rise, the dwindling supply of affordable homes could lead to increased homelessness and housing insecurity for many low and mid-income families.
Contrasting Trends in Luxury Housing Supply
While affordable housing supplies are diminishing, the opposite trend is occurring in the luxury housing sector. Homes priced at Rs 1 crore and above have seen an impressive growth of 48% over the past two years. Cities such as Bengaluru and Chennai lead this surge, with increases of 187% and 127%, respectively. Kolkata, Navi Mumbai, Thane, and Pune also reported significant growth in luxury housing availability, reflecting an overall shift in developer focus towards higher-end projects. Interestingly, while the luxury segment is thriving, both Hyderabad and Mumbai experienced declines of 11% and 14% in luxury housing supply, suggesting a nuanced market response. The stark contrast between the two segments raises questions about the sustainability of the housing market and the potential long-term implications for economic stability, especially for a country with a growing population and an increasing demand for affordable housing.
Implications for Future Urban Development
This housing crisis calls for immediate attention from policymakers and urban planners. The drastic decline in affordable housing stock is a clear indicator that current development strategies may not be meeting the needs of the population. As major cities struggle to accommodate new residents, it is crucial for the government to implement policies that encourage the construction of affordable housing units. Moreover, a balanced approach is necessary to ensure that both luxury and affordable housing markets can coexist. Addressing this issue will require collaboration between public and private sectors to create a sustainable urban environment that meets the diverse needs of all citizens. Without prompt action, India risks exacerbating its already critical housing crisis, which could have lasting repercussions for its economic growth and social stability.
