For years, owning a home worth ₹30 lakh to ₹40 lakh was considered an achievable dream for India’s middle-class families. But the situation is now changing rapidly. Rising property prices in major cities, growing focus on luxury housing, and declining investment in affordable homes are making it increasingly difficult for ordinary buyers to purchase a house within a reasonable budget.
A new real estate industry report has raised serious concerns about the future of affordable housing in India. While the country’s real estate sector is attracting record investment, experts say most of the money is flowing toward premium apartments, luxury projects, office spaces, and high-end developments instead of affordable residential housing.
This shift could make buying a flat under ₹40 lakh far more difficult in the coming years, especially for first-time homebuyers who depend heavily on home loans.
Affordable Homes Losing Space in the Market
According to a report released by ANAROCK Capital, India’s real estate sector could attract investments worth nearly ₹50 lakh crore over the next decade. However, the biggest concern highlighted in the report is that affordable housing is no longer receiving enough attention from builders and investors.
The report points out a major decline in the share of low-cost housing projects launched in recent years.
Sharp Decline in Homes Below ₹40 Lakh
In 2021, homes priced below ₹40 lakh accounted for nearly 26% of all new housing launches
That share has now reportedly fallen to just around 10%
At the same time, premium and luxury housing projects priced above ₹1.5 crore are rapidly dominating the market.
Today, more than half of new residential launches are reportedly concentrated in the premium and luxury category.
This trend indicates that developers are increasingly focusing on wealthier buyers rather than middle-income families.
Why Is Affordable Housing Becoming a Bigger Concern?
Experts say the problem is not a shortage of money in the real estate market.
Banks, REITs (Real Estate Investment Trusts), private equity firms, AIFs (Alternative Investment Funds), and institutional investors continue pouring massive capital into the sector.
However, most of this investment is being directed toward:
Mumbai
Delhi-NCR
Bengaluru
Premium residential projects
Commercial real estate developments
Affordable housing projects and smaller cities are receiving comparatively lower funding support.
According to ANAROCK Capital CEO Shobhit Agarwal, the real challenge today is not raising capital but ensuring that investment reaches the right housing segments where demand is highest.
India Still Faces Massive Housing Shortage
The report also highlights the growing gap between housing demand and supply in the affordable segment.
Housing Demand Estimates
India currently faces a shortage of nearly 1 crore homes
By 2030, the country may require at least 2.5 crore affordable houses
Despite such huge demand, the supply of low-cost homes continues to decline.
This raises serious concerns for:
Middle-class families
Lower middle-income households
Young salaried professionals
First-time homebuyers
For many buyers, rising property prices combined with expensive home loans could push home ownership further out of reach.
Thousands of Affordable Housing Projects Still Incomplete
Another major issue affecting the sector is the large number of stalled housing projects.
According to the report:
Around 4.5 lakh affordable and mid-income homes remain incomplete across India
Nearly ₹55,000 crore may be required to complete these projects
The government-backed SWAMIH Fund has already helped complete approximately 58,600 homes.
Meanwhile, the newly launched SWAMIH Fund 2.0 is expected to support completion of nearly 1 lakh additional homes.
These initiatives are aimed at helping stuck homebuyers who have been waiting for possession for years.
Home Loan Market Growing Rapidly
Interestingly, the report notes that demand for home loans in India continues to grow strongly despite rising property prices.
Housing Finance Market Expansion
India’s housing finance market has already crossed ₹38 lakh crore
The sector is projected to reach nearly ₹77 lakh crore by 2030
This shows that more people are relying on loans to buy homes.
However, experts warn that if affordable housing supply continues shrinking, middle-class buyers may eventually struggle to find homes that fit within their loan eligibility and repayment capacity.
Investors Now Focusing Beyond Residential Housing
The report also points out that investors are no longer focusing only on residential apartments.
Large investments are now moving toward:
Data centers
Warehouses
Logistics parks
Commercial office spaces
India’s data center sector is expected to expand rapidly by 2030 due to growing digital infrastructure demand, while the warehousing industry is also witnessing record growth because of e-commerce and logistics expansion.
As a result, affordable housing is facing even stronger competition for investment capital.
Rising Prices Could Change the Housing Dream for the Middle Class
Real estate experts believe the Indian property market is entering a phase where premium housing may dominate future development unless policy support for affordable housing increases.
If affordable housing launches continue declining while luxury inventory rises, many middle-class families may find it harder to purchase homes in large cities within budgets such as ₹40 lakh.
For buyers dependent on home loans, higher property prices, rising EMIs, and limited affordable inventory could significantly increase financial pressure over the next few years.
What Homebuyers Should Watch Closely
Experts suggest potential homebuyers should now carefully monitor:
Property price trends
Home loan interest rates
Affordable housing launches
Government housing schemes
Builder credibility
Completion status of projects
With market dynamics changing rapidly, affordability may soon become one of the biggest challenges in India’s housing sector.
Disclaimer: Real estate investments are subject to market risks and policy changes. Buyers should verify project approvals, loan conditions, and market trends before making any property purchase decision.
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