India’s housing market is currently facing a significant crisis, particularly in its top nine cities, which are popular job migration destinations. A recent report from PropEquity, a real estate data analytics firm listed on the NSE, highlights a startling decline in the supply of affordable and mid-income housing priced at Rs 1 crore and below. Over the past two years, this supply has plummeted by 36%, from 310,216 units in 2022 to just 198,926 units projected for 2024. Cities like the National Capital Region (NCR), Mumbai, and Hyderabad are reported to be the worst affected, raising concerns about the housing landscape for the growing urban workforce. In 2023 alone, the supply of such homes saw a drop of 30%, exacerbating the already pressing issue of housing affordability for the average Indian. The top nine cities facing this crisis include Bengaluru, Chennai, Hyderabad, Mumbai, Pune, Thane, Navi Mumbai, Kolkata, and NCR. The report reveals alarming statistics regarding the availability of homes priced under Rs 1 crore, indicating a drastic decline in key markets, which could lead to increased homelessness and socio-economic challenges.
Declining Housing Supply in Major Cities
The data showcases that the affordable housing segment is rapidly diminishing, with Hyderabad witnessing the most significant decrease. In the last two years, the number of homes priced Rs 1 crore and below has plummeted by 69%, bringing the total to merely 13,238 units in 2024. Mumbai and NCR have also experienced steep declines, with housing supply falling by 60% and 45%, respectively. In Mumbai, the total housing supply stands at 40,963 units, out of which only 6,062 are in the affordable category. Similarly, NCR’s figures are discouraging, with a total supply of 45,503 units and only 2,672 in the affordable range. Other cities like Bengaluru and Chennai are not faring much better, with declines of 33% and 13% respectively over the past two years. This alarming trend suggests a shift in developers’ focus towards luxury housing, leaving a critical gap in the market for affordable options, which is increasingly detrimental to the urban workforce.
Contrast in Luxury Housing Supply
While the affordable housing sector is struggling, the luxury housing market in India’s top cities is experiencing a boom. The supply of homes priced Rs 1 crore and above has surged by 48% over the last two years, indicating a growing demand for high-end properties. Bengaluru leads this trend with a staggering 187% increase, while Chennai and Kolkata also report substantial growth rates of 127% and 58% respectively. Other cities like Navi Mumbai, Thane, and Pune are experiencing increases of 70%, 53%, and 52% respectively. Notably, Delhi-NCR has seen a whopping 192% uptick in luxury housing supply, showcasing a stark contrast between the segments. However, despite the lucrative luxury market, cities like Mumbai and Hyderabad have recorded declines in high-end housing by 14% and 11%, respectively. This dichotomy in the housing market raises crucial questions about urban planning and the need for balanced development strategies that cater to both affordable and luxury segments.
Conclusion: A Call for Strategic Solutions
The ongoing housing crisis in India’s major cities demands immediate attention from policymakers, urban planners, and real estate developers. The sharp decline in affordable housing supply poses a serious risk to the socio-economic fabric of these urban centers, particularly as migration for job opportunities continues to rise. Without adequate affordable housing, the potential for increased homelessness and urban poverty looms large. Stakeholders must collaborate to create inclusive housing policies that encourage the development of homes within reach of the average Indian worker. Moreover, while the luxury housing market flourishes, it is imperative to ensure that the benefits of urban growth are equitably distributed. Implementing innovative solutions, such as incentivizing affordable housing projects and reviewing zoning regulations, can help alleviate the current crisis. As the urban landscape evolves, a balanced approach to housing supply will be instrumental in fostering sustainable development across India’s top cities.
