A report by PropEquity reveals that real estate developers are shifting their focus towards luxury housing, resulting in a notable decline in the supply of affordable and mid-income homes priced ₹1 crore and below. In 2024, the supply in nine major cities fell by 30%, from 2,83,323 units in 2023 to 1,98,926 units. This marks a sharp reduction from 3,10,216 units in 2022.
Severe Decline in Affordable Housing Supply Across Major Indian Cities
The shortage of affordable homes is impacting cities like Bengaluru, Chennai, Hyderabad, Mumbai, Pune, Thane, Navi Mumbai, Kolkata, and NCR. Bengaluru saw an 11% decline in supply, dropping to 25,012 units in 2024 from 28,206 units in 2023. In Chennai, the supply fell to 12,743 units from 13,852 units. Hyderabad experienced the most significant drop, with a 58% decrease, from 31,645 units to just 13,238 units. Kolkata also faced a 41% reduction in supply.
Both the National Capital Region (NCR) and Mumbai also saw significant declines in affordable housing supply. NCR’s supply dropped by 43%, falling to 2,672 units, while Mumbai saw a 31% decrease, with 6,062 units available. Over the past two years, Hyderabad’s supply in this category has fallen by 69%, while Mumbai and NCR experienced declines of 60% and 45%, respectively.
Surge in Luxury Housing Supply Amid Affordable Housing Shortage: A Looming Crisis
In contrast, the supply of homes priced above ₹1 crore has risen by 48% over the past two years. Bengaluru experienced the largest increase, with high-end housing rising by 187%, followed by notable gains in Chennai, Kolkata, and NCR.
The report highlights the risk of a housing crisis if the current trend persists, particularly with the increasing migration of people to tier 1 cities for employment. To tackle this growing issue, experts such as Samir Jasuja urge the government to incentivize developers and offer homebuyers tax benefits, home loan rebates, and stamp duty reductions.
