Household Income Growth Expected to Surpass Property Price Increases in India

Positive Trends in Housing Affordability

According to the latest CBRE Housing Affordability Index, household income growth in India is projected to exceed property price increases for the first time since 2021. This shift is expected to alleviate the financial strain on homebuyers across various income levels. The report highlights that this trend aligns with India's goal of achieving upper-middle-income status by 2030, amidst ongoing geopolitical challenges. It anticipates that home affordability in major Indian cities will stabilize between 2026 and 2028, driven by rising incomes and supportive policy measures.

The index evaluated affordability across three income brackets—Rs 40 lakh, Rs 75 lakh, and Rs 1 crore—focusing on cities like Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, and Pune. It analyzed the EMI burden in relation to the evolving aspirations of homebuyers from 2021 to 2028.

The findings indicate that the EMI-to-income ratio for all three income groups is likely to stabilize between 2026 and 2028, suggesting a significant improvement in homebuying affordability during this period. For households earning Rs 40 lakh annually, targeting 2BHK homes in areas such as Greater Noida, Thane, Navi Mumbai, Bengaluru North, and Hyderabad's Bachupally-Kollur corridor, the EMI-to-income ratio is expected to plateau, making properties priced between Rs 1.25–2 crore more accessible.

For those in the Rs 75 lakh income bracket, aiming for 3BHK units in Bengaluru East and West, Pune's Viman Nagar, Chennai South, and Hyderabad's Raidurg-Kondapur area, the affordability is shifting from 'moderate' to 'attainable' on the index scale. Meanwhile, individuals earning Rs 1 crore, typically looking for 4BHK premium homes in locations like HITEC City, Golf Course Road extensions, and Mumbai's Western Suburbs, can expect a noticeable reduction in their EMI burden over the forecast period.

New Property Launches to Address Market Demand

New launches to meet demands

The report also revealed that in 2025, new property launches and sales each surpassed 270,000 units. The luxury segment accounted for approximately 27% of total sales, surpassing the mid-range segment for the first time. Sales of premium and luxury properties saw a year-on-year increase of over 30%. Concurrently, supply rose by 38% year-on-year, with around 52,000 luxury units introduced during the year. Although sales volume decreased by about 8%, the overall sales value increased by approximately 15%.

Challenges in the Affordable Housing Sector

Affordable housing segment remains a challenge

The affordable housing sector, defined as properties under Rs 45 lakh, is currently facing challenges due to high input costs and the removal of specific fiscal incentives. CBRE Research suggests that a strategic government-led recalibration, including a review of price and area limits and the reintroduction of targeted incentives for developers and buyers, could help restore the segment's market share to pre-COVID levels of 25–30%. This adjustment could potentially add around 60,000 new units to the annual housing pipeline.